Costly and stressful: Are you prepared for a tax investigation?
Hundreds of thousands of innocent taxpayers have been targeted in investigations by HM Revenue & Customs (HMRC), according to a report in the Daily Telegraph.
In its report earlier this month the national newspaper revealed that two in five taxpayers targeted by investigations are innocent.
Responding to the report an HMRC spokesperson said: “Our compliance activity returns £18 for every £1 spent, and the National Audit Office has recognised that it provides good value for money.
“We investigate thoroughly information we receive on alleged non-compliance.”
Investigations are costly, stressful, and an unwelcome distraction from day-to-day life. The impact can be huge.
An investigation into your tax return by HMRC is triggered for several reasons: a tip off, paying the incorrect amount of tax, late returns or simply working within a targeted sector to name a few.
The revenue’s ‘snooper computer’ Connect collates data from banks, Land Registry records, Visa and MasterCard transactions, DVLA, council tax, VAT registration documents, Airbnb, and believe it or not even your social media profiles.
Random enquiries into tax affairs can and do happen. Whether you’re an individual taxpayer or business owner, an investigation is possible, and nobody is exempt.
Any taxpayer can be targeted by HMRC, answering all its questions takes time and the enquiries often drag on for months and sometimes take years to conclude.
It can cost a lot to defend you, whatever the result. That is why it as important as it has ever been for you to protect against these costs.
Once HMRC decide to investigate you must comply with their requests. HMRC will check your accounts, request a plethora of documentation, ask lots of questions and may even want to visit you in person.
No additional tax may be due, but you will still be left with enquiry fees which could cost thousands.
Whether HMRC initiates a Full Enquiry of your tax history or an Aspect Enquiry into a specific area of your return, you will be liable for the professional costs to bring about a prompt resolution.
Immediate professional representation from your accountant is essential in successfully and quickly dealing with HMRC enquiries, but that comes at a cost, and will not be in your budget.
There is help available. Tax Investigation Services, like the one WNJ offers its clients, will protect you from accountancy fees associated with an HMRC enquiry, limiting the stress and uncertainty.
As a member of the service we provide, in partnership with Croner-i, you can be safe in the knowledge that we will represent you in the event of an investigation and deal with HMRC on your behalf.
And the service has been boosted to now include access to ‘My Business Hub’ – a valuable online resource which allows you to tap into a taster of the company’s vast business resources.
The ‘digital toolkit’ has been developed by Croner, which has invested heavily to provide valued solutions to thousands of businesses for decades.
The hub delivers advice on subjects including taking on extra staff, health and safety policies and a range of legal matters, including employment law as well as access to expert thinking.
There’s never been a more critical time to have tax fee protection insurance in place or to review your existing insurance arrangements.
- To discuss any issues raised by this article and the insurance policy options available please contact me on 01772 430000
