What happens if I have been selected for a tax investigation?
Any person or business can be selected for an HM Revenue & Customs (HMRC) investigation at potentially any time – and the tax authority does not have to give a reason for placing you under investigation.
If you have been selected, HMRC will write to you confirming that an investigation is underway. At this stage, you should seek specialist advice sooner rather than later, as your accountant can intervene and liaise with HMRC for you on your behalf, helping to resolve the matter quickly, efficiently and with minimum disruption to you or your business.
Tight timeframes and hefty penalties
HMRC’s initial letter will usually request a response within a tight timeframe – typically of between 30 and 35 days.
Regardless of whether you are handling the matter yourself or have appointed an accountant to act on your behalf, it is important to respond to any written requests received from HMRC within good time throughout the investigation process, to ensure that hefty penalties are avoided.
If your accountant is liaising with HMRC on your behalf, they can deal directly with HMRC or the VAT office and negotiate much more effectively over issues such as penalties, interest and settlement returns – which is why it pays to seek expert advice from the very outset.
Two types of enquiry
There are two main types of HMRC investigation. A ‘full enquiry’ will delve into much greater detail and will usually require you to provide HMRC with business records for the entire year of enquiry, while an ‘aspect enquiry’ may only focus on an individual aspect of a tax return and is likely to be resolved much more quickly. Alternatively, you could be targeted with a VAT investigation.
Aspect enquiries typically take between three and six months, while a full enquiry could run on for 16 months or longer. By letting your accountant handle the hard work for you, they can help to ensure the investigation is brought to a timely and satisfactory conclusion. Better still, by taking out Tax Investigation Insurance ahead of time, you can ensure that professional fees are already taken care of should an investigation arise.
Appoint an expert
If you have been targeted with an HMRC investigation, get in touch with AGS Accountants today. Dealing with such investigations can be time-consuming, costly and, above all else, stressful, which is why it makes sense to appoint an expert to handle the matter on your behalf.
Our team also offer Tax Investigation Insurance to all of our clients. This means that if you are selected for investigation by HMRC, any professional fees you will incur in appointing AGS to handle interventions, reviews, enquires and disputes on your behalf will already be covered.
If you are facing an HMRC investigation or are interested in our Tax Investigation Insurance, get in touch with AGS Accountants today.
