1 / 9

HMRC Tax Investigations: The Basic Facts

While random HMRC Tax investigations used to be a rare occurrence, the tax authorities now have a wide range of sophisticated and effective tools at their disposal, making consultants who engage in risky behavior the most likely targets.<br>

Pearllemonaccountants
Download Presentation

HMRC Tax Investigations: The Basic Facts

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. HMRC Tax Investigations: The Basic Facts

  2. While random HMRC Tax investigations used to be a rare occurrence, the tax authorities now have a wide range of sophisticated and effective tools at their disposal, making consultants who engage in risky behavior the most likely targets. HMRC investigations are aimed at determining whether accurate information has been provided, as well as whether accurate tax amounts have been paid.

  3. HMRC Tax Investigations Advice Tax audits and inspections can be complicated and stressful, so seek professional advice as soon as a tax investigation begins unless you are certain of your position. Investigations frequently result in unexpectedly large tax bills, insolvency, and the need for a time-to-pay arrangement, a company voluntary arrangement, or even a creditors’ voluntary liquidation.

  4. Who is Likely to Face an HMRC Tax Investigation? Tax inspections are most common in businesses that are registered for VAT or PAYE, two areas where mistakes are common. Routine tax audits focusing on income tax or corporation tax are much less likely, unless HMRC has reason to believe you are concealing income or filing returns incorrectly. Be aware that deliberate concealment or even fraudulent activity can result in criminal investigations. And ignorance is rarely a sufficient defense.

  5. If any of the following apply to you are far more likely to be the subject of a tax investigation: ● ● ● ● ● ● You make mistakes on your tax returns that need to be corrected You file returns or pay tax late Your expenses are unusually high for your industry Your tax returns are inconsistent with your standard of living You have property income You work in a high-risk industry

  6. Types of Tax Investigations Aspect, full, and random investigations are the three types of tax investigations. Aspect enquiries will focus on one or more areas of your tax information; full enquiries will involve an inspection of your entire tax return; and random enquiries are a tool to evaluate tax returns in areas that are deemed to be high risk. All of them can be very serious.

  7. The HMRC Tax Investigation Process Explained HMRC will write or call you to let you know about the investigation and what they want to look into. A tax investigation will begin with a letter requesting information (referred to as an “information notice”). During a tax audit, the inspector will usually want to meet with you and look over your tax records. If you are the subject of a tax investigation, the letter will specify which parts of your tax return HMRC wants to examine.

  8. This might be: ● ● ● ● Your self-assessment tax return Your business tax return PAYE records and returns Your financial statements and tax calculations If you employ an accountant, HMRC will almost always contact them if they have the authority to do so. If you do not respond to a request for information or refuse a visit, you may be subject to a penalty.

More Related