There are a number of reasons why HMRC may elect to subject you to a tax enquiry or investigation and receiving the news can be worrying. But more often than not the key is not to panic. You may have been chosen to be investigated as a result of a tax return, specifically where there may have been a mistake or you may have included information which is incorrect. Alternatively, it could be that HMRC are responding to information from external or even internal sources where concerns have been raised about how your tax is declared, or quite simply, and most likely, you will have been selected at random.
Tax enquiries can take two forms: ‘full enquiries’ and ‘aspect enquiries'. Full enquiries can include all aspects of your tax affairs, which could involve both personal and business taxes being investigated including Income Tax, Corporation Tax, VAT, National Insurance and PAYE matters. Aspect enquiries are specific enquiries into particular area (or areas) of your tax affairs and are undertaken in isolation.
It is almost always the case that when facing a tax enquiry or investigation, professional tax and accountancy advice will be required. Our experienced tax team can support you at every stage of the enquiry and deal with HMRC on your behalf.
With investigations often running into months, professional adviser fees can be costly, but this is where Tax Inquiry Fee Insurance (TiFi) can help. Tax investigation insurance can cover you for the cost of professional fees in the defense or dispute of a claim, giving you the peace of mind that you can be fully reimbursed and that your case will be dealt with by trained professionals.
If you would like to find out more about how you can protect yourself against the cost of a tax enquiry or investigation please contact our tax team who will talk you through the options available.