|Tax Enquiry & Investigation-
The Crucial Stages
They call it "A Compliance check", an "Intervention", "an
Enquiry" or whatever fancy name is dreamed up for HMRC
saying they don't believe you or they have information that
"suggests" you have anything from a careless to downright
delieberate attitude in dealing with your tax liabilities. But
whatever the name you are under scrutiny by specialists
who deal with these INVESTIGATIONS every day of the
Do not speak to them without specialist advice (or at least
talk to your accountant) as they are there to get more taxes
in - they don't do an enquiry to repay tax!!!
This section relates mainly to "Local Office" cases and
does not deal with the more serious Code of Practice 9
cases . where HMRC are alleging fraud.
Stage 1-The start - They nearly always start in the same
way - the letter arrives just as you were getting ready for an
enjoyable weekend away. Why is it HMRC always plan the
letter to arrive on a Friday (or even worse Saturday
morning after your accountant has gone off fishing for the
weekend)? If you have an accountant acting he/she will
get a copy of the letter. If it is a local office he/she will also
get a request for loads of information that needs to be
supplied within 30/35 days.
HMRC will dictate a date that probably has got no
relationship to the time that will be needed to supply
everything but that is usually them setting out their stall that
you will do what they want when they want. But do not
despair they cannot bully you and must only do what is
reasonable. So have a level head and look to provide
matters fully and diligently (but only in a reasonable
timescale). If their time limit is too short get your accountant
to contact them (well in advance of any time limit set) and if
necessary get an extension. At the same time do consider
whether what they are asking is legally and reasonably
required for taking the enquiry forward.
Usually local office staff may well have one of the specialist
offices or teams accompanying them or advising in the
background. So be aware - loose tongues cost £x,000s.
Your enquiry can be an enquiry into one or two Aspects of
your return or a Full blown enquiry into all matters in your
return(s) which may well encroach into your private and
personal finances and lifestyle.
Each type of enquiry needs it's own response and Bill can
handle these to your best advantage.
Do not assume that just any practitioner can successfully
handle tax enquiry cases as an enquiry started badly can
seeking to get an early and effective resolution of the
Don't also believe you are getting the best from HMRC as
they are there to do a job and not usually assisting
taxpayers to pay the least amount of tax possible.
Each enquiry needs its own strategy and all that Bill will
need from you is the truth and your trust that he can
minimise your bill to your best possible advantage. Of
course it has to be a legal way of minimising your bill
otherwise we both end up in trouble.
Remember that you can get Nil or low penalties if you
make a voluntary disclosure before HMRC call on or
write to you. Contact Bill if you need assistance on
making a full disclosure - anytime on Mobile
Stage 2- You respond - It is at this stage that Enquiries
and Investigations are either won or lost. How you handle it
sets the scene for the enquiry. Handle it wrong and you
could be in for a drawn out enquiry (although most
enquiries are lengthy tasks lasting 6 months or more) or
worse an escalation to formal powers being used.
If we can sit down and discuss matters we should be able to
see a way to
(a) giving HMRC the comfort they need to satisfy their
concerns and close the enquiry
(b) managing the enquiry to resolve it to your best
advantage within the law
(c) casting an expert eye over your books and
records before HMRC's expert gets at them
You can rest assured that with Bill's involvement
your stress levels should be minimised.
Stage 3- Managing the enquiry - Knowing just what
HMRC can and cannot do within it's statutory powers
enables me to protect your rights and interests in all
types of enquiries.
Even an open minded Inspector has to consider all the
possibilities. Put yourself in his/her position. What would
you be thinking if you found
(a) an amount of bank interest had been omitted from a
(b) a sale hadn't gone through your books? or
(c) a personal expense had been claimed against profits.
All different possibilities might occur to the Inspector. This
can lead to drawn out enquiries and unwarranted invasions
of your privacy in an attempt to get to all the facts.
With early involvement in your enquiry and co-operation
from you I will be able to preempt such problems
and guide the enquiry to a satisfactory
Stage 4- Agreeing the outcome - Given that some
enquiries can be randomly selected ( but see ) it is not
unknown for HMRC to have a "Nil" result.
This would be our aim - A "Nil" result (assuming you
have been forthright in our discussions and you have not
been intentionally understating your income or doing other
If however profits have been understated then you will be
asked to sign important documents at some stage in the
enquiry and I can ensure that you are properly advised
on their completion and relevance.
Otherwise having hopefully been involved from the outset
my negotiation and presentation skills should
enable us to get the best result possible within
Stage 5- Preparing for Settlement - (A wee bit late for
me being involved for the first time to get the best value at
this late stage but I am confident that from an appraisal of
what has gone before I should be able to save you my fee
and more otherwise I will tell you right up front - and
probably not want to get involved.)
Remember that your adviser will need to understand both
the Old style and New Style penalties if your enquiry spans
years after 2009 and earlier years as well. You need to be
vigilant throughout as to what you are saying or disclosing
and doing it honestly and professionally as these aspects
all have a bearing on any penalties that HMRC seek.
If it is agreed in Stage 4 that your income has been
understated I can address with you and give you the
benefit of my experience of the commercial realities
of settling with HMRC.
If the unpaid duties are large enough you will find yourself
being asked to pay not only the duties unpaid but interest
on those duties and a penalty which statutorily could be
as much as the duties again (but seldom is unless
you have obstructed HMRC in carrying out their
Since April 2010 the penalty can now be 200% of the
duties if the HMRC are of the opinion that you
intentionally evaded duties and wilfully tried to
conceal matters with foreign income or assets
concealed. You need a good advocate on your side
and I can help. I can also ensure that HMRC use the
correct penalty legislation and don't try to exceed the
correct amount in settlement.
You may also qualify to have your penalties
suspended for post 2009 penalties and I can help you
in this matter.
It is the practice of HMRC to accept a mitigated penalty in
any offer you want to make. I can give you the benefit of
my knowledge from over 30 years of considering other
Inspectors figures and submitting cases for the Board of
HMRC's approval to get you the best deal possible. I have
also been doing this with a "fair modicum of success - see
testimonials" since 2006 on the client's behalf.
Properly armed with such information (and with
strong negotiating skills) it enables us to offer an
acceptable amount taking into account the factors of
disclosure, cooperation, size and gravity for periods
up to 2009 and "telling" and "helping" for more
I can also offer a review service to you (or your
tax adviser) in the unfortunate situation that
things go wrong with your enquiry at any stage
before I am involved. This review can be
conducted for or with the adviser and I will
provide possible solutions for your benefit.
I am also prepared to consider and advise on
work carried out by other advisers. However I do
not want to prepare accounts or do annual
returns so that your adviser will have no fears
that I am going to steal his bread and butter.
Contact me on 07751720507 or Send a Message
the stress in
The comments on this site are personal views and solely those of the author who retains the copyright. Each
enquiry has its own dangers and opportunities that require full and detailed considerations and advice. No
responsibility can be taken for any actions that the reader decides to take (or not take) after reading the text and
articles unless you engage with the company and Bill Stevenson on a proper fee paying client/tax adviser basis.
The personal views of Bill set out on this page do not constitute tax advice and are presented for enjoyment only
by the reader
WAMS Tax Ltd - Bill Stevenson - 07751 720 507