Tax enquiries & investigations

Like it or not, more and more of HM Revenue & Customs resources are being devoted to tax investigations of one sort or another. The additional tax generated from such investigations is considerable, and there is little or no prospect that activity on this front will diminish.

An HMRC tax enquiry can take many different forms. It may be:

  • A random enquiry.
  • An enquiry into a particular aspect of your (or your company's) tax return, which could be dealt with relatively simply or which could be a more technical matter.
  • A full enquiry into all your tax affairs for one or more years including, in particular, a detailed review of your the books and records of your business.
  • A VAT or PAYE routine visit or an in-depth enquiry.
  • A "serious" investigation, including one by the Special Compliance Office which could be an enquiry into irregularities or into a significant technical matter.

Even if you are happy that your accounting records are sound and your tax affairs are all in order, this does not mean that you will not be selected for enquiry: HMRC conduct many enquiries at random in addition to those prompted by information that they hold. Accordingly, every taxpayer is at risk of an enquiry or investigation by HM Revenue & Customs.

The Penalties

There are various penalties HMRC can seek to impose following an enquiry for undeclared income. As well as having to pay the tax, they may seek penalties up to an amount equal to the tax, so doubling your tax bill. Interest on the late payment of the tax is also part of the arrangement - not a pleasant experience. We can help you minimise these penalties.

Protect yourself now

You are able to protect yourself against the cost of representation in these investigations by subscribing to our Tax Enquiry Service for a small fee. Read more