Self Assessment Tax Investigations

Self Assessment Tax Investigation

Code of Practice 11 - Self Assessment

By their very nature, the worry caused in a HMRC tax investigations can damage your personal relationships, grind away at your health and seriously affect your ability to work effectively.

Contact us ASAP. You will feel a great weight lifted from your shoulders, allowing you to get on with your life, assured in the knowledge we are fighting your corner with the taxman.

HMRC will normally send you a letter stating that a self assessment tax investigation is being launched under Code Of Practice 11 procedure However, if it is carried out under Code of Practice 9 then the taxman suspects you of serious tax fraud.

Things you should know

The Friendly Letter

HMRC quote – “when we start an enquiry it does not mean that we think you have done anything wrong.  We check some tax returns to make sure they are right or if we need further information to understand the figures”.

That sounds like a straight forward friendly enquiry. Make no mistake, the taxman suspects that you owe tax or VAT and he is coming to get it. You haven't been selected at random - HMRC now has to justify the amount of money it spends on an investigation in terms of the amount of money recovered.

Without the right advice and representation, a tax investigation can spiral out of control - Call us ASAP.

There is no Choice

There is no way to stop a tax investigation. You comply with the inspector’s requests for information.

Guilty until Proven innocent

Tax legislation treats you as guilty until you prove yourself innocent. Under self assessment, you have a duty of care to ensure that your tax affairs are correct. Even minor mistakes are 'proof' of dishonesty for the tax man.

The taxman can go back six years

The taxman, on discovering a £2,000 error on your current tax return, may consider that you have made the same error over the previous 6 years. You will then be assessed for £14,000 plus penalties and interest. Your tax liability could easily be £20,000. In the case of serious tax fraud and offshore irregularities the taxman can go back up to 20 years under the  Taxes Management Act 1970.

The Interview

HMRC will no doubt invite you along for an interview. You are not legally obliged to attend this interview but the tax man might assume you are hiding something. If they subsequently discover that more tax is payable, they may increase levels of penalty. If you go to the interview, be aware that the tax man will be highly skilled in interview technique and you may leave yourself open to an attack even if you have done nothing.

For peace of mind, Get our tax investigation specialist on your side.

Unlimited Resources and Power

HMRC will invest the time required in analysing your records and asking lots of questions in to recover unpaid tax. You will be put through the ringer and ground down into submission, agreeing to pay what ever the ask for in order to make the investigation go away.

Don't give in to bully boy tactics - Call us

Inspectors are on a Bonus

That's right - in the case of successful recovery of tax, the inspectors are paid a bonus. They also reward when the achieve targets. HMRC expects a successful conclusion to in over 75% of all investigations. This means that 3 out of 4 people under investigation will end up paying extra tax, penalties, interest and professional fees.

The average tax investigation lasts 18 months and results in a tax settlement of around £3,000 and will cost you £3,000 in professional fees.

Information Sharing

The Tax Office and VAT Office have been combined and now share all information. The Internet is used to gather business information. HMRC also pays informers for sensitive information

Business Profiles

HMRC have profiles of every type of business sector imaginable. If information on your tax return is out of sync with this profile, you return will be flagged up for investigation. One of the principal statistics used is based on gross profit margin comparisons. You will need a set of accurate accounts to defend against unrealistic comparisons based on on the business economics model. Conversely if your books are inaccurate you will find it difficult to defend your case.

Higher targets

The tax office wants to collect an extra 25% tax year on year from investigations. With government finances under pressure, more and more resources are being made available. 'Campaigns' are launched from time to time to target particular business. Examples are plumbers, people who rent a second property, chiropractors etc.

How We Can Help

  • All contact with HMRC is through us
  • We manage HMRC technical challenges with ease
  • We can liaise with your solicitor and accountants
  • We will keep updated at every turn
  • We will fight your corner and make sure you pay only what is due
  • We will take away the stress and worry, allowing you to sleep at night

Without exception, when the taxman comes knocking, he wants to recover tax and VAT. In serious cases, we have saved companies literally tens of thousands of pounds - a fraction of the fees that we charge.

Contact us TODAY for some friendly, helpful advice.

Get in Touch

Don't bury your head in the sand and hope nothing will happen. Contact Ken Robinson today for professional representation. We can work with your solicitor or accountant and will limit the damage any HMRC TAX & VAT investigation can do, taking away all the worry and stress, and giving you total peace of mind. Typically, we achieve reductions in tax and penalty liabilities of 75% which more than compensates for our fees.

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"Like many small accountancy practices we do not have the in-house specialist tax expertise required in order to support our clients during an HMRC investigation. So it is reassuring to know that we can offer our clients the specialist tax advice they need, as and when required. This happened recently with a client who needed international offshore tax advice and planning for non-resident status in the UK. Thankfully Ken was able to provide this advice promptly and professionally."
Liz - Guildford, London


Tax Investigation Experts

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