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    Tax Enquiry Handling

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    Tax Enquiries

    An investigation by HMRC is stressful, can take up a great deal of time and, in the worst case scenario, can leave you facing a nasty tax bill.

    Harwood Hutton is vastly experienced in handling Tax Enquiries on behalf of private individuals, businesses, trusts and corporates. We will fight your corner and seek to achieve the best possible outcome.

    HMRC probes all kinds of tax including, and not limited to, income tax, capital gains tax, corporation tax, landfill tax, National Insurance contributions and VAT.

    There are several reasons you might attract HMRC’s attention and eventually be investigated. These include:

    • HMRC receives a tip-off
    • Your business routinely takes cash payments
    • You consistently file late tax returns with major inconsistencies
    • Your business operates in a sector HMRC has targeted
    • Your business is randomly selected by HMRC for investigation.

     

    There are two main types of HMRC enquiry:

    Full Enquiry
    A Full Enquiry looks at cases where HMRC believes there is significant risk of error in the tax return. If you’re subject to a Full Enquiry, you can expect the Revenue to undertake a comprehensive review of your records. For businesses, this may include scrutinising the personal financial records of directors or the business owner as well as all business-related records.

    Aspect enquiry
    An aspect enquiry happens when HMRC is concerned about one or more specific elements of your finances. These are usually straightforward mistakes or misunderstandings rather than deliberate attempts at tax evasion, such as forgetting to include all your savings income on your self-assessment tax return. These types of inquiry may appear less stressful than full investigations but they should still be treated seriously. If HMRC uncovers anything else during its inquiry, it may upscale it to a Full Enquiry.

     

    What happens during an HMRC visit?
    HMRC needs to adhere to strict procedures when visiting. You might want to ask them for a copy of the rules in advance, or we may be able to advise once you have appointed us to act for you.

    HMRC may ask to visit you at your business premises, home, or your accountant’s office. Or they may ask you to visit them. You’re entitled to have an adviser such as your accountant present.

    HMRC must tell you what they want to discuss in advance of a visit. If you wish, you’re also entitled to ask for the agenda in writing before the event, and the HMRC officials must stick to this agenda. It’s absolutely vital you answer the questions to the best of your knowledge, and that you give complete and accurate information.

     

    What happens after an HMRC investigation?
    Once the investigation finishes, HMRC will write to you to explain the outcome.

    If they find something wrong on your returns but are not convinced the errors were made fraudulently or negligently, they will tell you how they think the return needs to be corrected. You have 30 days to make the correction. If you fail to do so within this time, HMRC can correct the return themselves.

    If HMRC believes you have acted with negligence or fraudulently, you will face penalties, extra tax, and interest.

     

    Can I protect myself against paying a hefty bill defending a tax enquiry?
    Yes, Harwood Hutton offers a subscription service which for a very competitive fee covers you against any professional representation costs incurred in your defence against HMRC.

    Click here to find out more about our Tax Investigation Service.

     

    Facing a tax enquiry? Contact us as soon as you can.

    See also Tax Disputes

    Videos

    TAKING THE STRAIN

    Cathy Rouse explains how we handle tax enquiries on behalf of clients

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    Client Testimonials

    • I always get quick, clear and definitive responses from the Harwood Hutton tax team – commercial answers to commercial issues.

      Robin Berry – Morgan Management

    • Right from the outset Harwood Hutton gave us direction and great advice – and that advice has evolved over the years as we’ve grown. We’re both medium-sized companies providing a bespoke service – one furniture, one accountancy – and the relationship works.

      Andy McCarron, McCarron and Co

    • I’m deeply impressed with Harwood Hutton’s extensive knowledge of tax arrangements for residential and commercial property landlords.

      Qadeer Ahmed, MD, ABA Finance

    • They really took their time to understand what was important to us and our business and the expertise we required. Whoever we speak to at HH, we get the same fantastic response and technical input. It’s a real partnership.

      Edward Finch, group MD, MRIB insurance brokers

    • I have worked with the directors at Harwood Hutton on a number of mutual client matters over many years. The reassurance of their clear, commercial and focussed advice is one of the main reasons I regard this as one of my most valuable professional relationships.

      Frank Wessely, Partner, Quantuma LLP

    • Harwood Hutton never seem to rest on their laurels. They are always seeking out new avenues and ways to improve their offering. A very forward-thinking company with staff who are always well briefed and who approach each task with drive.

      Karl Austen, MD, Surefoot Communications

    • We have engaged Harwood Hutton in several areas of structuring, including VAT issues, decoupling an SPV from a group structure and HMRC clearance for a transaction. The team have exceeded all expectations by being proactive, measured and very thorough.

      Adam Fawsitt, Director, FHT Limited

    • We moved to Harwood Hutton as they delivered a succinct and professional proposal. If anything, we have been more impressed post-move. They are a fantastic company to work with. They do truly differentiate. They have the skills and capabilities of a mega firm but with a personal service.

      Edward Finch, group MD, MRIB insurance brokers
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