At Gilbert Tax We know how stressful dealing with HMRC and a tax investigation can be. Whether you've received a letter from HMRC, have unpaid tax to disclose, or are already under investigation, our team is here to help.
Our tax investigation team are specialists in resolving personal and business tax issues in an efficient and timely manner. We act as a shield between you and HMRC.
We will handle all communication with HMRC on your behalf so whilst your case is being resolved you can focus on more important things without stress or worry.
Before individuals and businesses are selected for a tax investigation, HMRC conduct a rigorous exercise to try to ensure that the information that they are basing their belief that there is something wrong with the tax affairs of the person they intend to investigate.
As such, it should be noted that HMRC rarely raise a tax investigation without believing that there is something wrong and it is highly advisable to speak with a tax investigation expert before responding to any correspondence from HMRC.
There are a number of different tax investigations and also a number of different units within HMRC from which enquiries emanate. The most serious sort of tax investigation is one where HMRC are considering prosecution. The first someone will know about this is either a letter to attend a meeting under caution or at worst a dawn raid.
The simple answer to this question is that there is no requirement in law for you to attend a meeting with HMRC. This does not mean that a meeting should not take place as long as you are prepared correctly and it is in the your interests to do so.
In some instances you may be required to provide bank statements, but not always. This depends on various different circumstances. If HMRC have not found and errors in your accounts or tax returns then this can be strongly resisted. If there are errors established then HMRC have a much stronger case for requesting them as part of the Inland Revenue Enquiry.
The key to getting the best result with regards to a tax investigation is control. The best way to keep control is to engage with someone who has significant experience of dealing with tax investigations who will ensure that HMRC are provided with what the law allows and no more.
Managing the flow of information to HMRC and knowing how to tell HMRC if there are issues before HMRC find them is also important and all of this can have a significant impact in:
Most HMRC tax investigations follow a format and most people (including accountants) just assume that HMRC are entitled to anything they ask for. They get a request for information and rush round in a panic to provide it.
Our experience is that HMRC often ask for significant amounts of information in a tax investigation which they are not legally entitled to. Where this information is provided, it leads to many additional questions which would not have been asked if HMRC had been restricted to what the law says they can have. If nothing else this leads to costs and time delays that were not needed.
Figuring out how to pay overdue income tax is a more common problem that many people believe. There are many people who set out as self employed (especially in times of recession and redundancies) and find it a struggle to keep up with all of the paperwork. They often mean to register for tax and then do not quite get round to it as looking after a new business takes a lot of time and effort. Year two will then pass (with the best intentions of registering to pay tax but never quite getting round to it due to other pressures).
The individual then often becomes frightened and believes that if they go to the tax man they will get thrown in jail. They then spend the next few years dreading the brown envelope from the tax man hitting their doorstep. HMRC recognise that there are many people in what they call the Hidden Economy and have a number of "Hidden Economy Teams" around the country who's sole aim is to bring people back into the tax system.
Prosecutions for this type of offence are very rare and if a person voluntarily comes forward to HMRC to disclose untaxed income for a number of years HMRC normally will accept a settlement to include tax, interest and a penalty.
A problem for many individuals is that business records have not been maintained for the whole of the period. Although this makes the task of preparing the figures more difficult this is not impossible, especially if your advisor has experience of reconstructing past information and estimates.
The main cost, in most instances, of getting back into the system for tax purposes is a financial one. It can be done and once most people have started the process, as long as they have the right guidance and advice they often feel much happier.
HMRC tax investigations are very stressful and difficult for the person under enquiry even if handled well. If handled badly a tax investigation can be unbearable and how they are handled affects many issues mainly relating to the actual amount of tax due and the penalties charged.
It should always be noted that HMRC rarely raise a tax investigation without believing that there is something wrong.
Before individuals and businesses are selected for a HMRC compliance check, HMRC conduct a rigorous exercise to try to ensure that the information that they are basing their belief that there is something wrong with the tax affairs of the person they intend to investigate.
HMRC could be investigating you for one or more of a number of different reasons. Despite a common misconception that the income tax investigation is a random enquiry nearly all Inland Revenue investigations are conducted because HMRC believe that there is something wrong with your tax affairs.
The process of selecting a case for an Inland Revenue Investigation is quite intense. HMRC have access to information from a number of sources, including banks, local authorities, newspapers, Yellow pages, local directories and of course the internet.
This sort of information will be gathered and stored. The advent of the computerised self assessment method of taxation launched in 1997 means that HMRC have information on their computer system relating to your business on a year on year basis and they are also (due to the trade classification codes that are allocated in every instance) able to compare not only your businesses year on year results but with those in your local area who operate in the same field of business.
In addition the encouragement of informants over the last few years has given HMRC an additional seam of information.
All of these factors are looked at and if HMRC hold some (supposedly) hard information from an informant and there are unexplained differences between your business and that of your local competitors then the likely hood of a full blown Inland Revenue Investigation increases.
This is not to say that the information that HMRC have is correct or that there assumptions are correct it is just to say that they believe that there is the distinct possibility that the accounts and tax returns are incorrect.
HMRC are very unlikely to reveal any information as to why they are enquiring into your tax affairs. They will occasionally give hints to specialist advisors and accountants and inferences can be taken from correspondence and meetings (if one is held).
However, the official line is that they are not conducting and income tax investigation they are merely checking that your return is correct and most people subject to an Inland Revenue investigation will not be told the reason why that tax investigation commenced.
The real answer to this is that sometimes HMRC will agree a time to pay arrangement with interest charged on the debt. They need to be satisfied that the individual or business cannot raise the funds from other sources and that there is a realistic chance that they will be able to meet any payments due under any time to pay agreement.
This can often take significant amounts of time as HMRC are reluctant to agree time to pay if any other option is available and will want very detailed information about an individuals asset position and income and outgoings.
Non-judgemental. We are here to help, not to judge
Rigorously defend your position within the scope of the law
Take control of the HMRC investigation
Efficient process to achieve the closure of your investigation
Get in touch with us for confidential and no-obligation tax advice.
Call us on:
0800 011 9625
Email us at:
scott.gilbert@gilberttax.co.uk
Take the complexity out of resolving your tax investigation.
Our wide range of tax investigation services are designed to help you reach a positive resolution.
Call 0800 011 9625 or email scott.gilbert@gilberttax.co.uk for a free, confidential chat about your case.
We will help you better understand your situation and how we can help you achieve a resolution.
Our team of tax experts will manage your tax dispute and work towards achieving the best possible outcome.
"We understand that people sometimes make mistakes in their dealings with HMRC and that HMRC make mistakes in dealing with taxpayers. Many people do not know how to deal with HMRC or who to turn to for help resolve the tax dispute.
Our firm of tax advisors specialise in resolving people's problems with HMRC. We have extensive expertise in dealing with all forms of tax investigations and tax disputes as well as with taking matters to the Tax Tribunal where agreement cannot be reached.
We deal both directly with the individual who is under enquiry and also work with many firms of accountants supporting them in dealing with HMRC disputes and advising them on how to handle HRMC to get the best result.
The fact is that proper management of HMRC is the best way of reducing the tax, interest and penalty as well as the time taken in resolving any tax dispute.
Our expert team are none judgemental and rigorously defend your position within the scope and parameter of the law. We take control and manage the process to minimise the interruptions that any form of tax investigation causes to an individual's life and business."