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News – 10.04.24
Form PF: Are you up to speed with the latest developments?
Through this insight we will bring to your attention the main changes in a bitesize manner so that you can stay abreast of the requirements as they may apply to your firm. … Read more
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Why you need to submit your pre-R&D claim notification form now
Failing to submit a pre-notification form could jeopardise your R&D claim. Learn more about this new requirement. … Read more
Upcoming event – 29.04.24
Governance code updates and advice for Further Education colleges from Buzzacott and the ESFA
Join Buzzacott and the ESFA for a governance update for further education colleges … Read more
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130 Wood Street, London, EC2V 6DL
enquiries@buzzacott.co.uk T +44 (0)20 7556 1200
HMRC typically opens an enquiry because it has information that there is something wrong with your tax affairs, although they may not admit this from the outset.
Each year, HMRC receives access to more data through various sources including but not limited to Companies House, Land Registry, and onshore and offshore banks. Very rarely, it is because your case has been selected at random.
This data is collected and inputted into HMRC’s 'Connect’, which is a powerful AI system that assists in identifying tax investigation risks and targets. This machine learning tool, which gets more capable every year, coupled with highly trained staff, means so too does HMRC’s ability to uncover potential fraud at a granular level.
However, various other factors may prompt HMRC to send a tax investigation letter. As such you may also find yourself the subject of HMRC tax investigation in the event:
We strongly recommend you cooperate with HMRC, and appoint a specialist to represent you.
Specialist advisers, such as ourselves, can guide you around potential pitfalls to ensure you are best protected. They will also allow you to get ahead of any accusations by HMRC and should reduce the overall cost of any investigation.
We provide a discreet and comprehensive service that is tailored to meet your unique needs and protect your interests. We will carry out a comprehensive review of your tax affairs to ensure we have a full understanding of the issues and risks you are facing, prepare a strategy going forward to minimise your potential exposure to unnecessary tax, interest and penalties, present to HMRC should a disclosure be necessary, and aim to fast track your investigation to resolution at minimum cost and disruption to you.
The length of an investigation can vary on a case by case basis, ranging from one letter to several months, and in more technical cases, even years.
Appointing a specialist to represent you will speed up the process.
In most cases, six years for carelessness, or for errors that have occurred despite reasonable care, four years. However, if tax investigators suspect that you have deliberately avoided paying taxes, HMRC may examine your tax filings going back as far as 20 years.
There are four potential outcomes of being investigated by HMRC, and while prison time is one, only a relatively small number of people wind up in prison as a result of HMRC tax investigation. The four potential investigation outcomes are:
HMRC is under pressure to increase the number of criminal prosecutions it undertakes and the use of its ‘naming and shaming’ powers. Tax fraud is a serious crime and does carry the potential for a custodial sentence. However, most of HMRC's investigations are undertaken under their civil powers, which means the decision has already been taken to work your case on a civil basis, with a view to a potential financial settlement.
Engaging specialist advisers will ensure criminal prosecution, and the threat of prison time, is avoided.
If you’re the subject of a code of practice 9 investigation, then you must personally meet with HMRC when requested. Otherwise, your presence is not mandatory.
Meetings with HMRC can become confrontational and extremely stressful, and very rarely progresses the investigation. By choosing our Tax Investigations and Dispute Resolution team, we’ll work with you to decide if your attendance at a meeting with HMRC is necessary and in your best interests. If required, you’ll be trained and prepared on how best to handle the meeting and we will be in attendance with you. Should you not be required to attend nor in your best interests, we will attend and make representations on your behalf.
Anyone can be investigated. It’s a common misconception that HMRC tax investigations only happen to high profile businesses or celebrities. In fact, HMRC tax investigations are initiated every day against individuals from every income group and businesses large and small.
If you receive notice that HMRC has opened an investigation into your filings, we strongly recommend you get in touch and enlist the help of our professional tax investigation team. We will make sure your case is handled fairly, discreetly and minimise any potential penalties.
Call us today on +44 (0)20 7710 3389 or fill in the form below and a member of our team will be in touch. All communications are in the strictest confidence.
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