Tax Investigation Services
Are you under an investigation by HM Revenue & Customs? If you are concerned about the possibility of an HMRC tax investigation or have been notified that you or your business are being investigated by HMRC, we can help. Under tax investigation:
- HMRC has the right under law to inspect your books and records at any time.
- Under Self-Assessment legislation HMRC investigate taxpayers at random.
- HMRC does not have to give a reason for an investigation or have any suspicion; no one is immune from investigation.
- A full investigation is likely to involve HMRC looking at all of your affairs.
- As an alternative to a full investigation, HMRC can raise an aspect enquiry, which will fall short of a full enquiry, but will instead concentrate on one or more aspects of the return.
- The average length of a full investigation can be over 12 months.
- Tax investigations can disrupt the day to day running of the business.
How likely is a tax audit or investigation?
Tax investigations and frequent tax audits are more likely if:
- you file tax returns late, pay tax late or make errors that need correcting
- there are inconsistencies or substantial variations between different returns, such as a large fall in income or increase in costs
- your costs are abnormally high for businesses in your industry
- your tax returns are inconsistent with how busy your business actually is or your standard of living
- you have offshore bank accounts
- you have income from property
- you operate in a high-risk industry, such as businesses that routinely take cash payments, or an industry that HMRC has decided to target
- HMRC receives a tip-off
How far back can HMRC go during an investigation?
The tables below shows the tax investigation time limits within which HMRC can go back and audit your accounts. The length of time they can go back depends on the seriousness of the investigation:
|Time limit for normal behaviour, e.g. a Self-Assessment random check on your tax return (years)|
|Time limit for careless behaviour, e.g. failure to self-assess correctly (years)|
|Time limit for deliberate behaviour, e.g. tax fraud (years)|
TAX INVESTIGATION SERVICES
We can advise and defend a client who is under investigation by HM Revenue & Customs (HMRC) in respect of any of the following events:
Self-Assessment Full Enquiries
This is triggered when HMRC issues the S9A, S12AC TMA 70 or Paragraph 24 (1) Schedule 18 Finance Act 1998 Notice together with a request to examine all the business books and records or, in the case of a personal taxpayer, all the underlying documents used in the preparation of the Self-Assessment return.
Income Tax Self- Assessment Aspect Enquiries
This is triggered when HMRC issues the S9A or S12 AC TMA 70 Notice where there is a request to examine just certain boxes on the Return.
Corporation Tax Self- Assessment Aspect Enquiries
This point is triggered when HMRC issues the Paragraph 24 (1) Schedule 18 Finance Act 1998 Notice for a request to examine just certain boxes on the Return.
HMRC Enquiries under IR35
The Service covers HMRC IR35 Status disputes. However, there must be a written Contract for Services in respect of the liabilities which are being disputed. The Contract must have been strictly followed and there must be a reasonable prospect of successfully contesting the Revenue’s allegations.
Employer Compliance Disputes
The Service covers PAYE, P11D and NIC disputes and the trigger point is the issue of a letter, assessment or notice by HMRC, following a Compliance visit, providing there is a prospect of reducing the alleged liabilities.
HMRC VAT Disputes
The trigger point is the issue of a written decision or assessment by HMRC, following a control visit, providing there is a prospect of reducing the alleged VAT liabilities.
Schedule 36 Enquiries
The trigger point is a written request from HMRC to inspect assets, documents, records or business premises in accordance with Schedule 36 Finance Act 2008 in respect of Income Tax, Corporation Tax, PAYE, NIC, VAT & CGT.
We’d love to hear from you. Whether you have a question about Accounting, Tax, VAT Returns, Payroll or anything else, we are ready to answer your questions