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Derbyshire Tax Services Ltd

Tax consultants & accountants for Derby, Derbyshire & the East Midlands
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Investigations (commonly known as tax enquiries)
 
Being investigated by HM Revenue & Customs (HMRC) can be a worrying and financially painful experience. If this is happening to you, or if you feel you need to make a voluntary disclosure of undeclared income or gains, you need experienced professional help on your side as soon as possible. 
 
How can we help?

You can get help from us today whether you have just received the first letter notifying that HMRC have opened an enquiry - or if you have been struggling to deal with HMRC yourself.

Whether things have gone wrong accidentally or deliberately, we can help ease your concerns about dealing with HMRC and present your case in the best possible light, and negotiate the lowest possible settlement.

If you have an existing tax advisor or accountant and they require additional tax support in handling the enquiry, we can work alongside them or behind the scenes without disturbing your existing day-to-day relationship or we can take over all aspects of the enquiry and bring it to a conclusion.
 
What are tax investigations, enquiries and/or compliance checks?

Generally, these occur when HMRC decide to look more closely into your tax affairs or those of your business. Most tax matters these days are dealt with by HMRC using a “process now, check later” approach. This is a method whereby entries made on Tax Returns are accepted at face value by HMRC and they are usually processed upon receipt without question. HMRC then have a range of inspection powers enabling them to make enquiries (sometimes called compliance checks) into Tax Returns. These checks may be focused on specific points or can extend as far as requesting sight of business records and other evidence to support claims and elections made on your Return.

If HMRC consider that certain claims are excessive or incorrect and you can't convince them otherwise, they will demand any additional tax that may be due. Of course all this may happen months after you filed your Return, so it is likely that if there is any further tax to pay, it will technically be late. Therefore, HMRC will charge interest and surcharges for late payment and could also impose penalties as well! In some cases this may well prompt HMRC to enquire into Tax Returns for earlier years as well.
 
How do HMRC select cases for enquiry?

A few enquiries may be selected randomly by HMRC, but the majority are prompted by the entries on your Tax Return (or lack of them!). Others may result from information supplied to HMRC by other government departments or from third parties such as banks (including overseas banks) or from anonymous informers.

There are different types of investigation. Some can be relatively simple but others can be more far-reaching and in the most serious cases - carry the risk of prosecution if things have gone really wrong.
 
Tip

There is no substitute for keeping extensive contemporary records which can easily be brought to hand, if requested by HMRC, to support the entries made on your Returns and the reasons why you made certain decisions in completing your Returns.