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Are You at Risk of a Tax Investigation?

Anyone and any business can be subject to a tax investigation, without exception.

There are many situations that may lead to a tax enquiry from HMRC. It could be unusual activity or inconsistency in your tax records or accounts, a tip-off, or you may work within a targeted sector … you may never know why you are investigated.

HMRC is entitled to check your records and ensure you’re paying the right amount of tax at any time. The first step of any investigation is a request for information, such as:

  • Accounts and tax calculations
  • Self Assessment tax return(s)
  • Corporate tax return(s)
  • PAYE records and returns
  • VAT returns and records

Any type of tax can form the nature of a tax investigation.

During a full tax investigation, all business records are reviewed. With limited companies, the tax affairs of the company directors are also scrutinised. If you are the subject of an aspect or random enquiry, only certain aspects of your or your business’ tax records are analysed.

In addition to requesting records, HMRC representatives may ask additional questions and request interviews with involved individuals.

Being prepared for tax investigations

Tax investigations are almost always unexpected. However, being proactive offers peace of mind that, should you be contacted by HMRC, your information is current and easily available. Key steps to take are:

  1. Keep your bookkeeping and accounts up to date.
  2. Regularly reconcile your bank balance and your accountancy software balance ensuring each transaction is explained.
  3. Ensure invoices are kept for all monies received.
  4. Avoid basic accounting errors that might trigger an automatic tax investigation.
  5. Submit all tax returns on time.

Working with an accountant is the best and easiest way to ensure your accounts and tax records are accurate and compliant.

Tax investigations can be stressful, time consuming and expensive. Depending upon the nature of the enquiry, investigators can analyse records from the present tax year to up to 20 years ago. Therefore, it’s good to know that an expert team used to liaising with HMRC is on your side. The Hargreaves Owen team is here to help resolve your tax investigation as smoothly and quickly as possible.

Fee protection during tax investigations

The average tax enquiry takes up to 24 months to conclude. Accessing professional support during this time can become expensive. It is possible to protect yourself against the cost of an HMRC tax enquiry. Our tax investigations package [link to leaflet file] is designed to provide the best possible outcome as our professional team acts on your behalf throughout the enquiry, with our professional fees covered by your insurance policy.

The number of HMRC tax investigations is increasing and you may be selected for a detailed review of your tax affairs at any time. It’s good to know that, should HMRC contact you, we’ll manage the process on your behalf and you are not at risk of incurring professional fees.

To save the money, stress and time of a tax investigation, contact us for a bespoke quote without obligation. Fee protection and reassurance are available – why risk the cost and stress of a tax enquiry? 

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