Each year HM Revenue & Customs (HMRC) undertake an enormous number of tax enquiries into individuals and businesses to check they have paid the right amount of tax. HMRC have strengthened their approach to enquiry work by using wider powers and sophisticated software and consequently have secured a record £34.1 billion of additional tax revenue in 2018/19, up a staggering £3.8 billion on the previous year.
Why is HMRC investigating?
In the UK we live in an environment in which the taxpayer is responsible for their own tax liability. HMRC opens investigations, on a random or selective basis, to see if the taxpayer has paid the right amount of tax. All this helps the government fill its deepening public finance black hole.
Moving forwards, we expect to see an even greater increase in the number of tax enquiries as HMRC look to recover the enormous £350bn government spend through the Covid-19 pandemic, as well as ensuring that the measures put in place to support the economy have been utilised correctly by taxpayers.
Tax enquiries can last for months, even years and defending you against HMRC’s detailed questions requires specific expertise and can be time consuming and costly. Indeed, the cost of dealing with an enquiry can amount to thousands of pounds, even if no extra tax is payable.
Where our service comes in…
If the HMRC states its intention to investigate your tax payments don’t panic. Then call us – your trusted advisors and best defence.
We will translate the many complicated questions the taxman may pose, manage the entire conversation with the taxman, help you submit any required information and minimise the impact on your business or personal accounts.
Tax Enquiry Fee Protection offers peace of mind…
To provide peace of mind, we offer all of our clients a Tax Enquiry Fee Protection Service. The service is backed by an insurance policy which we have taken out in our own name and under which we can claim the costs of defending clients who face tax enquiries.
Alternatively you can call your local office or email firstname.lastname@example.org
The Service is backed by an insurance policy from Vantage Tax Fee Protection Ltd which we have taken out in our name.
Beware of “Connect”!
HMRC now uses a sophisticated database called ‘Connect’ to start more than 80% of tax enquiries. The system collects data from 30 different sources, including UK and offshore banks, Companies House, the Land Registry, estate agents, the DVLA and other licensing authorities, and social media.
The data can be instantaneously reviewed by more than 3,000 HMRC investigators to produce a financial fingerprint for any taxpayer. If there are any discrepancies between tax returns or business accounts sent to HMRC, a tax enquiry will follow as sure as night follows day. Tax enquiries started from ‘Connect’ have produced billions of pounds in additional tax over the last few years.
Using ‘Connect’, HMRC can now target enquiries more accurately than ever before – but they still get it wrong sometimes. That’s why we will always challenge HMRC regarding their reasons for an enquiry when defending clients.