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What is a tax investigation and why am I being investigated?
A Tax Investigation is an official inquiry into your tax payment history. A Tax Investigation in the UK is conducted by HM Revenue and Customs (HMRC) with the severity of an investigation being completely dependent on the case. There can be many reasons for tax investigations and inquiries, for example;
- Following a tax return;
- As a result of a mistake or misunderstanding;
- Conflicting information from another source or whistle-blower;
- A random check;
- Or, because there is information which is incorrect.
The most important thing is to identify the type of the tax inquiry and how best to deal with it. Sometimes identifying the reasons behind the tax inquiry may assist in that. Often HMRC will be reluctant to disclose very much detail at the outset.
How much tax will I have to pay?
Put simply, how much tax you have to pay depends on whether tax has in fact been underpaid. If so, HMRC will want it paid. However, a tax inquiry will seldom be as clear cut as HMRC believe at the beginning. Often there will be factual variations, sometimes technical tax issues, and often we will discover other issues that will mitigate the tax due.
How much paperwork will I have to produce?
Some cases can involve detailed analysis of large volumes of financial records, bank statements and other documents. You may require assistance from a specialist tax lawyer to help you obtain, collate, interpret and present this. Alternatively, sometimes the quantity of paperwork can be contained if the investigation is very specific.
Get Protected Now with FZCO Accountants
Coming under enquiry by HMRC can be a daunting and stressful experience. Our Specialist Tax Investigation team is experienced in addressing HMRC’s concerns and bringing matters to a fair conclusion whilst keeping your direct involvement to a minimum so you can concentrate on the more pleasant things in life.
FZCO Accountants manage all stages of the process with HMRC from meeting with HMRC to understand their concerns and agree the work required through to gathering the information necessary to establish the relevant facts and presenting those facts to HMRC, quantifying the amount of any additional tax payable, negotiating with HMRC where the facts are unclear or the technical position is open to alternative interpretation and ultimately concluding a final settlement with HMRC to draw a line under the past and bring all of your tax affairs to up to date.
The areas we specialise in include:
- major investigations conducted by HMRC under Code of Practice 8 (“COP 8”) where fraud is not suspected but matters are complex and the potential outstanding tax is large. The eyes have now become fixed on landlords.
- making voluntary disclosures to HMRC where omissions or possible omissions need to be brought to HMRC’s attention – for instance:
– disclosures of omitted income from letting residential properties under the Let Property Campaign.
– general disclosure through HMRC’s Digital Disclosure Service.
– disclosures of complex matters to HMRC specialist technical teams.
- exiting and settling matters related to marketed tax avoidance arrangements
- advice on how to respond to HMRC “nudge letters” hinting – maybe wrongly – that you might have something to tell them about.
- Instruction of Tax Counsel, bringing appeals to the Tax Tribunal, appeal management and case support.
- Resolving HMRC investigations and making voluntary disclosures to HMRC with regard to furlough claims made under the Coronavirus Job Retention Scheme.