Background
HM Revenue and Customs (HMRC) is continually trying to ensure everyone pays ‘the correct amount of tax’ and, using their rapidly increasing powers, are getting tougher on non-compliant tax payers.
If HMRC look into your tax affairs, this may be called an enquiry, an investigation, an intervention or a compliance check.
Being selected for enquiry or even going through a routine compliance check can be very stressful and time consuming.
We can manage the whole process for you thus reducing the worry and presenting your case in the best possible way. We have a detailed knowledge of the rights and powers of the taxpayer and can negotiate with HMRC to ensure that any settlement of unpaid tax, interest and penalties is minimised.
Detail
If HMRC do select you for an enquiry it may be that you have been chosen at random or alternatively, HMRC might believe that there is an error in your tax return or that the income declared does not appear to support your lifestyle. HMRC believe that carrying out some random checks encourages everyone to deal with their tax affairs properly.
An enquiry can only be opened when you have sent in a tax return. Broadly, if you filed your tax return on time and made no changes to it, HMRC have 12 months from the date you filed the return in which to open an enquiry.
A check can only take place before a return is submitted. So in a check, HMRC should be looking at current records rather than those that have been used to prepare a tax return that has already been submitted. HMRC use checks so that they can check how your business records are being kept and make suggestions to you about these, if necessary.
During an enquiry, HMRC will ask questions about your tax return. They may also ask to look at some of the documents you have used or will use to complete your tax return. HMRC have the right to ask to see information or documents that they reasonably require for the purpose of checking your tax position.
Receiving an enquiry or a compliance check letter from HMRC can be a worry for many taxpayers but it does not automatically mean you have done something wrong, sometimes the enquiry may simply be asking a question to clarify something HMRC do not understand or to send them some particular documents to support information already provided.
The important things are to read carefully what HMRC are asking for and to seek professional assistance if necessary. Here at Muras Baker Jones we can manage the whole process for you thus reducing the worry and presenting your case in the best possible way. We have a detailed knowledge of the rights and powers of the taxpayer and can negotiate with HMRC to ensure that any settlement of unpaid tax, interest and penalties is minimised.
Tax Investigation Service
HMRC enquiries can turn into long, disruptive investigations potentially lasting years in some instances. A longer enquiry is more distressing and more costly in terms of professional fees for representing a taxpayer.
With this in mind we are re-launching our Tax Investigation Service again this year which, for a modest annual subscription, ensures our fees in the event of an enquiry, or even a routine compliance check, are covered in full*.
If you are interested in subscribing for this service for peace of mind then please contact our Tax Director, Jenny Marks.
To see our other news items please visit our Muras Baker Jones – Blog.
* some exclusions do apply and details can be provided on request.