Tax investigations

We provide expert advice and guidance throughout the tax investigations, enquiries and disclosures process.

Whether you are facing a routine tax enquiry from HMRC, considering voluntary disclosure through one of their current facilities or if you are confronted with an in-depth investigation with potentially damaging financial consequences, we have the experience to determine the right course of actions for you. We will take the time to acquire intimate knowledge of your situation. To this, we will apply our technical knowledge of the relevant tax legislation, our up-to-date understanding of the current evolving tax landscape and our many years’ experience dealing with HMRC, in order to offer you bespoke and targeted advice tailored to your specific needs.

Dealing with a tax enquiry

Enquiries – or, as HMRC now term them, ‘compliance checks’ – into tax returns are typically a fairly routine matter. Given that some are initiated on a random basis they can hit anyone who files a tax return. Investigations are a good deal more serious.

Investigations can target anyone, regardless of whether they routinely submit tax returns, and are typically triggered by the analysis of information that has come into HMRC’s possession. While investigations may commence on a civil basis, HMRC reserve the right to pursue prosecution in cases that they consider to amount to serious fraud.

If, as a result of an enquiry, it proves necessary to concede a point to HMRC and additional tax is payable as a result, there will also be a liability to interest and, usually, penalties of perhaps 20% or 30% of the tax. Where tax has been evaded, however, the stakes can be far higher – not just larger penalties (which increased to a maximum of 200% of the tax liability from 6 April 2011) but also the possibility of a court appearance and, in extreme cases, a prison sentence.

The next step

For a confidential discussion about your position or that of a friend or family member and to find out how we can help in your particular circumstances, please contact one of our tax advisers at your nearest location, or complete the contact form.

Disclosures to HMRC

It is over ten years now since it first occurred to HMRC that they might recover more tax at a lower cost to them by offering taxpayers a streamlined opportunity to disclose more significant past omissions, placing the burden of calculating the liabilities (and the associated interest and penalties) on the taxpayer or their agent but typically offering incentives to encourage people to come forward. The carrot has been accompanied by a stick in the form of publicity about the volume of information that HMRC are receiving and threats of severe penalties, possible prosecution and even ‘naming and shaming’ of those who don’t disclose and are subsequently ‘found out’ by the Revenue.

Offshore liabilities

HMRC have placed the greatest emphasis on a series of opportunities to disclose liabilities with an offshore dimension. The background to these has been a steady flow of information to HMRC in respect of offshore accounts, whether from whistleblowers or as a result of formal agreements with particular jurisdictions or more co-ordinated arrangements for the exchange of information. The latest opportunity to disclose is the Worldwide Disclosure Facility.

UK liabilities

HMRC’s approach in respect of UK liabilities has centred on ‘campaigns’ – efforts to obtain information, publicity, and opportunities to disclose that have been targeted at particular sectors or occupations. Many of these campaigns have now closed but it is still possible to make a disclosure via the Card Transaction Programme (for businesses that accept credit or debit card payments and haven’t included all transactions in their returns), the Second Incomes Campaign (for those who are employed and have additional income that has not been taxed), and the Let Property Campaign (for individual landlords letting out residential property in the UK or abroad). Individuals or companies that do not qualify for these campaigns (or for the Worldwide Disclosure Facility) can use HMRC’s Digital Disclosure Service.

The next step

Talk to us! Some disclosures are still best dealt with via ordinary correspondence. If it is appropriate to use a disclosure facility or campaign, there is typically a great deal of work to be done within a fairly short period. For a free ‘no names’ discussion of how we can help you, please contact Mark in our London office now or, alternatively, get in touch with one of your local UHY tax experts.

Let's talk! Send an enquiry to your local UHY expert.