The most important thing to remember whenever experiencing a tax enquiry by HM Revenue & Customs (HMRC) is to get professional representation. An investigation of this kind can be a long and drawn out process, sometimes stretching over a two year period, sometimes longer.
The step by step process we have put together below outlines the course a tax enquiry is likely to take.
Opening a tax enquiry
When HMRC opens a tax enquiry into your tax affairs you will be advised by letter and are normally asked to provide them with a range of business records.
We would advise that you do not submit anything before appointing a tax enquiry expert to ensure your interests are protected.
HMRC has strict regulations it must adhere to and we can support you in this process by checking that they are allowed to ask for the records they are requesting during your tax enquiry.
Meeting requests from HMRC
In the majority of tax enquiries, HMRC will request either a formal or informal meeting with you.
We strongly advise not to meet with them during an enquiry. HMRC do not tell you that this is not a legal obligation and will try to persuade you to meet with them.
We will not allow HMRC's tax inspectors to interview any of our clients under tax enquiry unless forced to do so by law. Under no circumstances should any client meet with an HMRC tax inspector without a representative from Lawrence Grant being present.
The on-going tax enquiry process
You can be assured that we will negotiate with HMRC on your behalf to minimise any direct contact with them during your enquiry. This will hopefully relieve some of the stress of being involved in the process as it can be tense and worrying.
During an enquiry, should the inspector ask for additional records and information, such requests will be directed through us, and if HMRC can legally ask for them, we will then request them from you.
Negotiating a settlement
We will negotiate with HMRC during your enquiry to calculate any additional tax due and discuss fair HMRC tax penalties.
Our experience has shown that penalties normally range from about 10% (for a careless mistake on a tax return) to about 40% (for greatly understated profits or a deliberate omission of income from a tax return).
If you do owe additional tax you will be liable for a tax penalty but it is our job to ensure that this is as low and as fair a penalty as we can. If you do not owe HMRC a penny then we will prove that!
We cannot stress enough the importance of appointing a professional tax enquiry adviser, like ourselves, to deal with your enquiry, as we have many years' experience in encountering HMRC.
Making an appeal against HMRC
If we feel that HMRC is issuing incorrect assessments during your enquiry, we will appeal against them on your behalf and we will never agree a tax settlement if it is not legal and enforceable.
Closing a tax enquiry
Once the tax liabilities and tax penalties, if any, have been negotiated and agreed, there will be just one small matter to resolve – organising payment of your tax bill.
Call us now on 020 8861 7575 and speak to one of our experienced tax investigation partners – Paul Levy or Alan Rajah - or please complete the form on the right and we’ll call you straight back (within 24 hours) and answer any questions you may have.
If you have received a letter from HMRC opening a tax enquiry into your affairs please do not put it off any longer!
I just wanted to put in writing how very pleased I am with the services you have provided. Earlier this year I was faced with the task of sorting out the extortionate tax bill I received from HMRC. Justine Davies, I must say how impressed I was with your professionalism and how you were able to gather information and rectify this for me, plus the savings you made were incredible – over £44,000. I know I will have no trouble in the future as now my accounts are in order. Please accept my thanks and appreciation for all the hard work you have done.