Surviving a tax investigation
21st February 2018
It’s the moment every business owner dreads – a letter from HMRC lands on your doormat, which you open to find out your records are under investigation.
For most people, who have never knowingly done anything wrong, a tax investigation can be a worry.
While there’s no denying that an investigation from HMRC can be stressful, there’s no need to panic.
You may not be at fault
If you are under investigation, it doesn’t necessarily mean you have done anything wrong.
Reasons for an investigation range from HMRC spotting something unusual on your records to being targeted because of a high risk of tax evasion or fraud in your sector or area.
Some investigations are purely random which unfortunately means that other than keeping and filing accurate records, there’s not a lot you can do to avoid one.
Find out how serious it is
Some types of investigation are more complicated than others so you’ll need to find out which type you are under.
An aspect inquiry looks at certain areas of your records, while a full inquiry scrutinises your whole tax return.
Generally speaking, you’ll need to provide more information for a full inquiry.
HMRC wants to get to the truth rather than try and catch people out. The Revenue’s guidelines state that it wants to “work together on a cooperative, non-adversarial basis in order to resolve a dispute”.
With this in mind, keep up a dialogue and if you’re not sure about something – ask.
The stress and cost of an investigation can be reduced if you get professional advice early on.
We are on hand to share the burden throughout the whole process and get you back to business as usual. We can even deal with HMRC on your behalf if you wish.
A tax investigation is an expense you probably haven’t budgeted for but even the simplest cases require external help.
To protect you against an unwanted bill our tax enquiry fee protection service covers the costs of an investigation. Get in touch if to discuss if this is suitable for you.