Tax investigations: What to do when HMRC comes knocking

Your business could be picked out of a hat for a tax investigation.  However, the Taxman now has extremely sophisticated software and tools to analyse your accounts and tax returns.  These days it is more likely that a business will be quickly and easily targeted for an investigation if it stands out for any of the following reasons:

• Late filing of tax returns
  
• Unpaid tax liabilities
• Errors or omissions on tax returns
• Fluctuations in tax returns (a drop in income, or increased costs)
• You receive a tax refund (common for VAT returns where sales are zero rated)
• Your income levels do not match the ‘norm’ for your business sector
• Exceeding turnover thresholds for various tax schemes and not acting accordingly
• You work in a high risk industry that has been targeted by HMRC
• Your income levels are not consistent with your standard of living
• HMRC receives a tip-off

HMRC could investigate your business in relation to its CIS, PAYE, VAT, Corporation tax or Self-Assessment Tax Returns.

Don’t Panic

Whilst HMRC may have found an inconsistency in your tax returns, or highlighted a risk area, there could be any number of legitimate reasons for this.

In most cases we find that providing HMRC with full answers to their questions, and sending them the necessary documents and evidence, will lead to them simply agreeing with your tax calculations and moving on.

What to do

• Keep high quality accurate records
• File returns on time
• Pay your tax on time
• Seek advice from TorrWaterfield

Contact TorrWaterfield – 0116 2423400

If you do receive a letter from HMRC, contact us straight away.  We can assist you throughout the entire tax investigation. 0116 2423400

We will:

• Offer help and advice
• Contact HMRC on your behalf, replying to their correspondence by post, email and telephone
• Use our premises for meetings with HMRC
• Appeal against HMRC’s decisions if necessary
• Keep you updated throughout the whole process

Fee Protection

Many investigations are concluded after one letter, meeting or phone call.  But some can be on-going for months or years.

We encourage all of our clients to take out our fee protection.  This typically costs £190 per year.  We can then recover our cost from a third party, rather than charge you for our services. 

Stuart Caney, Accounts & Tax 

If like many of our clients you wish to benefit from this please contact Hollie Crown now for a personalised quote.