We help with
investigation/Enquiry

Most tax investigations happen because HMRC has reason to believe that some aspect of your tax return or business accounts is wrong. They may have received a tip off, some figures in the tax return may not tally with other information they have, or the return may have been sent in late.

One important way to minimise the risk of becoming a target for investigation is to make sure your personal tax return and company accounts are always delivered to the appropriate agency (Companies House/HMRC) on time. Another way to avoid suspicion is to use the dns online accounting portal, employ a good accountant, keep hold of receipts and be scrupulous about correct reporting. Another thing, never ignore any correspondence from HMRC.

No. HMRC randomly selects a proportion of tax returns every year. In the first two years of self-assessment, some 15,000 returns were investigated. HMRC will write to you to let you know that your affairs are being investigated although it will not normally give the reason behind its decision to launch an enquiry. Under the self-assessment regime, the Revenue must start any enquiry within 12 months of the last filing date of 31 January but there is no requirement for an investigation to conclude within a fixed period of time.

If it is found that a tax payer has intentionally misled the tax authorities, punishment can be severe: prosecutions, jail sentences and stiff fines designed to recoup the unpaid tax and penalties.

HMRC usually contacts you to arrange a visit. They normally give you seven days’ notice. They’ll confirm what information they want to see, how long it’s likely to take and if they want to inspect your premises. You can also ask them to delay the visit.

HMRC can look back up to 20 years to recover VAT lost due to criminal or civil VAT fraud. HMRC has the power to arrest, without a warrant, anyone suspected of criminal VAT fraud or using false documents (Value Added Tax Act 1994 S.72 (9)).

Part of HMRC’s review of powers has sought views on applying the relevant provision in the Police and Criminal Evidence Act 1984 (PACE) across all of its activities.

Changes introduced in the Finance Act 2007 gave trained officers harmonised powers to apply for search warrants, production orders and powers of arrest across all areas of taxes. These are subject to important safeguards generally attached to criminal investigations.

In serious cases of fraud, HMRC can bring in the Special Compliance Office, an elite unit responsible for the most high-profile investigations. The SCO has the power to negotiate settlements and can also agree not to prosecute a taxpayer as long as full disclosure is made.

Yes, but taxpayers’ affairs are confidential and information will only be disclosed to people that the individual agrees it may be given to, such as dns or another adviser. But, HMRC can ask former employers, customers, suppliers or colleagues for information relating to its investigation

Yes, of course, but you may have to go back through the whole accounts’ years (legally you must keep six years), and to collate this and submit it all is quite a job if you are still trying to run a company.

Yes, if you have subscribed to our Tax Investigation Service we will look after searching, collating, submitting all the documents requested and required. We will liaise with the tax authorities on your behalf and help you every step of the way. You will also have access to a legal helpline to make your tax investigation work easy.

There is an article on our blog. Or you can visit the HMRC website for more detailed information.