Tax investigations: What you need to know

In recent years, HMRC have launched various checks on specific industries. It is not uncommon for a business to receive a letter from HMRC advising that they want to carry out a routine VAT or PAYE check. This sounds fairly innocent but can often lead to a more in-depth enquiry because they are entitled to review all transactions across the business. IR35 and employment status disputes also seem to be on the rise.

Investigations can be costly, disruptive and stressful for businesses and may result in long-term reputational damage. Consequently, business owners need to be aware that even simple errors on a tax return can be a red flag to HMRC and could lead to an investigation

HMRC can visit at any time. That’s why we’ve listed 3 reasons why we think it is vitally important you get the advice you need, when you need it:

  1. In light of the Coronavirus pandemic, there has been an increase in the number of grants and schemes made available such as the Coronavirus Job Retention Scheme and the Self Employed Income Support Scheme (SEISS). HMRC is actively increasing its number of tax enquiries in order to raise more tax revenue.
  2. Many tax enquiries are conducted at random so you could find yourself at the centre of a tax enquiry at any time, even if you have done nothing wrong.
  3. The professional fees associated with a tax enquiry can amount to thousands of pounds.

Tax Investigation Service

Carpenter Box offer a Tax Investigation Service for clients which takes away all of the stress, leaving you with nothing but the important things to worry about. The arrangement enables us to make a claim against our insurance policy held with Professional Fee Protection in respect of any fees that would otherwise be incurred (up to £100,000 per claim unless otherwise indicated).

We defend a client who is subject to events including:

  • A full enquiry
  • A business inspection notice
  • VAT/PAYE disputes
  • Employment status disputes
  • IR35 checks
  • Gift Aid inspections

To find out more about the service or any concerns you may have about HMRC tax investigations, please get in touch with a member of our tax team on 01903 234094.