HMRC is responsible for ensuring that individuals and businesses in the UK are paying the correct amount of tax. HMRC takes its responsibilities extremely seriously and launches thousands of HMRC investigations each year to look into taxpayers’ affairs. Being the subject of an HMRC investigation can be a daunting experience, but with the right advice, its impact on your commercial operations can be minimised.

At Altion, we have a department of specialist solicitors and barristers who are dedicated to assisting and supporting clients with all HMRC matters, including HMRC Investigations. Whether you are facing an investigation or simply need advice on ensuring your tax affairs comply with the relevant law, our team are on hand to provide you with the concise, straightforward and commercially focused advice you require during what can be an incredibly stressful time.

For a confidential free discussion, call us today on 01908 414990,  alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.

 

Different types of HMRC Investigations

HMRC investigations can vary in scope, complexity and purpose. Some businesses are selected because they operate in a sector identified by HMRC as being at high risk of underpaying tax, whereas others may face a tax investigation because HMRC suspects wrongdoing. If you receive a letter or phone call from HMRC notifying you of their intention to launch an investigation into your tax affairs, you must not ignore it. By facing the issue head-on and cooperating with HMRC, you have a far better chance of its officers showing leniency if the HMRC investigation undercovers irregularities. Seeking timely legal advice from expert legal advisors like ours will enable you to understand your position, ensure HMRC’s officers limit the scope of their investigation to that permitted by law, and give you the best possible chance of securing a favourable outcome.

Examples of some common types of HMRC investigations include the following:

  • Compliance Check

A compliance check is a common type of HMRC investigation. It may involve HMRC officers reviewing your tax returns, records, and other relevant documentation. HMRC carries out compliance checks to make sure that businesses are paying the correct amount of tax, deter tax evasion, and ensure fairness throughout the tax system. Whilst many compliance checks are routine, you must still properly engage with the officers to ensure the investigation proceeds smoothly and that any issues are addressed swiftly and efficiently.

  • Code of Practice 9 (COP9) Investigations

Unlike compliance checks, which HMRC may conduct at random, COP9 HMRC investigations are only initiated when HMRC suspects serious tax fraud or evasion. If you receive notice that HMRC is initiating a COP9 investigation, you must address the issue as a matter of urgency to avoid facing criminal prosecution.

As part of the COP9 investigation, you will be given the opportunity to disclose any irregularities in your tax affairs under the Contractual Disclosure Facility (CDF) in exchange for HMRC agreeing not to pursue criminal charges. Our expert HMRC solicitors will assess your position, advise on the best way to approach the investigation and guide you through the process.

 

What to expect during an HMRC Investigation

The extent of an HMRC investigation depends on its nature. There are various categories of investigations, including ‘aspect’ and ‘full’. Aspect enquiries typically relate to a discrete aspect of a tax return and usually last no longer than six months. Full enquiries involve HMRC officers reviewing your tax affairs in far greater detail and can last for 18 months or more.

Regardless of the type of investigation HMRC initiates, you will invariably need to provide the officers with detailed information about your tax affairs. Our HMRC solicitors will review HMRC’s requests and ensure they are reasonable. We will assist you in collating the necessary documentation and presenting it to HMRC. If you are required to attend meetings with HMRC, we can accompany you to those meetings and liaise with HMRC on your behalf.

 

Potential outcomes of HMRC Investigations

There are several potential outcomes to HMRC investigations. They include the following:

  • You have overpaid tax

If HMRC’s officers discover you have overpaid tax, you will receive it back.

  • You have underpaid tax

If the HMRC investigation shows that you have underpaid tax due to a mistake, you will have to pay any monies owed with interest.

  • Deliberate wrongdoing

Or if you are found to have deliberately evaded tax, you may face financial or criminal sanctions. In severe cases, you may face both. Usually, HMRC will demand that you repay the tax together with an additional penalty. However, it reserves its right to pursue criminal prosecutions where it considers it necessary to do so.

 

There are several proactive measures you can take to encourage leniency on the part of HMRC. They include cooperating with HMRC and informing them of any potential irregularities before the officers identify them. Our solicitors have vast experience in representing clients facing HMRC investigations and will use our knowledge and expertise to secure the best possible outcome for you and your business.

For a confidential free discussion, call us today on 01908 414990,  alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.