HMRC Enquiries – Could you be next?
HMRC compliance activity in 2018/19 yielded £34.1bn, a whopping 12.5% increase on 2017/18. You may think that you’re not at risk from a tax enquiry as you’ve done nothing wrong or are too small for HMRC to worry about. In fact, any individual or business of any size can be selected at random for an investigation.
HMRC continue to expand their data sources, and have access to data from merchant acquirers, banks and building societies, property-based information, land registry, letting agents, mortgage applications, DVLA, foreign data from overseas tax authorities, not to mention the tax evasion hotline which anybody can report you to!
Now more than ever, HMRC are using their compliance resources to undertake targeted campaigns and cross-tax enquiries in an attempt to maximise the amount of tax they can recover. Given the recent spending spree that the government has been on in order to mitigate the effects of Covid-19, and the confusing, complex and rushed processes surrounding furlough and other support schemes, it would not be surprising if HMRC ramped up their compliance activity even further over the coming years in order to catch any errors, and ensure that any unpaid tax is recovered.
If you are unlucky enough to be selected for an investigation, for whatever reason, we are here to support you. We will challenge HMRC’s assertions and assumptions head on, verify that the basis of any enquiry is correct, and ensure that your case is handled fairly. We will provide all necessary documents from our records, communicate with HMRC on your behalf, and attend any required meetings to help you fight your case.
Even if the investigation concludes in your favour, with no further tax to pay, you will still be liable for the costs incurred. In recent years enquiries have started to take more time to deal with, even several years in a worse-case scenario. The longer an enquiry takes, the more expensive it becomes, and you could end up with a bill for tens or even hundreds of thousands of pounds at the end.
Fortunately, we offer a comprehensive Fee Protection package which covers you for up to £125,000 of our fees for supporting you during an investigation. In addition, clients who sign up to our Fee Protection package have access to a team of qualified solicitors and barristers available 24/7, 365 days a year through our Legal Helpline. The law is constantly changing, and this helpline service will ensure that you are able to get up-to-date advice with any employment law, health and safety, or commercial query.