Why am I being investigated?
Some taxpayers may never be investigated. Others may face one or two enquiries in their whole lifetime ranging in complexity from answering a simple question to a full in-depth review of all areas of a taxpayer’s life in so far as it has a tax implication.
Taxpayers with complicated financial affairs may be more closely monitored reflecting the level of potential lost revenue to the exchequer if an error goes undetected.
Time should be taken at the outset of any enquiry to determine exactly who is being investigated, for what period and in what areas. However, HM Revenue & Customs are not obliged to answer any of these questions to either the taxpayer or their adviser.
What happens next?
Following an initial letter from HMRC, the taxpayer may be invited to make a Disclosure.
A tax investigation may be conducted in full by post. In other tax investigations the taxpayer may be invited to a meeting.
Most tax investigations will follow months of work “behind the scenes” including the collation and review of documentation and information already in the hands of HMRC from various sources such as other UK government departments and overseas jurisdictions.
Who is in control?
HMRC will seek to direct and control all tax investigations, seeking to dictate when responses to their letters should be received.
Taxpayers should be alert to any mandate being requested by HMRC as, once signed, the taxpayer will have no control on how that mandate will be exercised or be provided with copies of any response, unless requested by the taxpayer.
However, you, the taxpayer should be in control. By working with Haines Watts, we can retrieve the initiative back from HMRC and guide you through the process. Part of handling a tax investigation is knowing what is coming next and being fully prepared beforehand.
What happens when an investigation is concluded?
If one of the specialist offices of HMRC takes over an investigation, once the investigation has been concluded the normal tax office will resume responsibility for that taxpayer’s tax affairs.
If you wish to discuss this or any other matter with a member of the team, please contact us.