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Compliance checks can either target a particular aspect of your tax return (known as an aspect enquiry), such as a claim for relief or a specific item of income, or they can be a full enquiry into all areas.
HMRC rarely selects cases at random. More than 90% of investigations will be initiated because HMRC holds information suggesting something is wrong, although they may not admit this from the outset.
HMRC will often request information and documents to establish whether you’ve underpaid tax and to understand the behaviour that led to your underpayment. Such requests can be onerous, and if you don’t have the knowledge or confidence to challenge HMRC’s requests, you could find yourself subject to what can only be described as a ‘fishing expedition’, where HMRC take advantage of your willingness to cooperate. Where a business is involved, HMRC can also ask to inspect the business premises.
These compliance checks can be extremely disruptive and stressful for individuals and businesses. Appointing the right advisor to deal with HMRC on your behalf will allow you to continue to focus on developing your business and lead to a quicker resolution of your case.
There’s no set limit for how long a compliance check can last as everyone’s circumstances will vary. Some cases can be dealt with swiftly if managed correctly, while others can spiral out of control and last many years if they haven’t been pro-actively managed.
Under their own charter, HMRC have a duty of care to taxpayers for their enquiries not to become protracted. If you’ve any concerns about the duration of an ongoing compliance check seek, specialist advice.
Once an enquiry has been resolved, HMRC may impose penalties. The level of penalty will depend on the behaviour that led to the inaccuracy in the return and the level of cooperation that you’ve shown throughout the enquiry. Further information relating to penalties following the conclusion of an enquiry can be found here.
When considering appointing specialist representation, advisers and taxpayers should ask themselves these questions:
If you choose to get specialist advice from Buzzacott, we’ll:
Buzzacott’s Tax Investigations and Dispute Resolution team has been honoured as the ‘Best Tax Disputes/Investigations Team’ at the prestigious Tolley’s Taxation Awards 2019. These awards recognise the finest achievements and talents of remarkable individuals and teams across the entire tax profession. The team is led by Mark Taylor, who is a recognised expert on all areas of tax investigations and disputes.
We can guide you through the compliance check process and act as your representative and agent, ensuring you have minimum contact with HMRC and safeguarding your best interests.
For more information on the above or to speak to one of our specialists, please fill out the form below and we’ll be in touch to arrange a good time for a phone call to discuss your requirements. All communications are in the strictest confidence.
