Are you protected against a HMRC enquiry?

Each year HM Revenue & Customs (‘HMRC’) undertake an enormous number of tax enquiries into individuals and businesses to check they have paid the right amount of tax. Since 2010 HMRC have strengthened their approach to enquiry work by using wider powers and sophisticated software and consequently secured a record £34.1 billion of additional tax revenue in 2018/19, up a staggering £3.8 billion on the previous year. We expect the number of enquires to grow exponentially as the Government looks to recover the enormous £350bn government spend through the Covid-19 pandemic, as well as ensuring that the measures put in place to support the economy through this period have been utilised correctly by taxpayers.

Are you protected against a HMRC enquiry? If not, you can find out more below about our Fee Protection Service.

Why is HMRC investigating?

In the UK we live in an environment whereby the taxpayer is responsible for their own tax liability. HMRC opens investigations to see if the taxpayer has paid the right amount of tax on a random or selective basis. All this helps the government fill its ever expanding public finance black hole.

Beware of “Connect”!

HMRC now uses a sophisticated database called ‘Connect’ to start more than 80% of tax enquiries. The system collects data from 30 different sources, including UK and offshore banks, Companies House, the Land Registry, estate agents, the DVLA and other licensing authorities, and social media.

The data can be instantaneously reviewed by more than 3,000 HMRC investigators to produce a financial fingerprint for any taxpayer. If there are any discrepancies between tax returns or business accounts sent to HMRC, a tax enquiry will follow as sure as night follows day. Tax enquiries started from ‘Connect’ have produced billions of pounds in additional tax over the last few years. Things like Making Tax Digital (‘MTD’) only gives HMRC more information to help their investigations.

Using ‘Connect’, HMRC can now target enquiries more accurately than ever before – but they still get it wrong sometimes. That’s why we will always challenge HMRC regarding their reasons for an enquiry when defending clients.

What could an investigation involve?

HMRC so far has been targeting the SME sector, medical professionals such as dentists/doctors and ‘hidden wealth’ in particular, where HMRC call upon individuals who are apparently living beyond their declared means. They often have specific campaigns aimed at such groups, but everyone is at risk of an enquiry.

HMRC may have information about an offshore bank account, an expensive asset like a luxury car or even images from Google Earth showing a large extension. Reviewing records up to six years old is not uncommon and cost thousands to defend. If they can prove there is deliberate fraud, they can even go back 20 years. Imagine the time it would take and the anxiety this would cause you and everyone close to you.

Covid-19

As an additional benefit this protection provides complementary telephone access to employment, health & safety and general legal advisors, including support for employers with any adjustments made in response to the COVID-19 pandemic.

When HMRC comes knocking…

Case of mistaken identity – A husband & wife partnership selling and installing double glazing was investigated by HMRC. At a meeting, HMRC alleged the husband had been dishonest. By the end of a long and detailed enquiry, HMRC repaid £129 of tax to the partnership and apologised, confirming that the allegation of dishonesty was a case of mistaken identity.

Accountancy fees were approximately £5,000 and were paid in full by our Fee Protection Policy.

Where our service comes in

If the HMRC states its intention to investigate your tax payments don’t panic. Then call us – your dedicated accountant and best defence.

We will translate the many complicated questions the taxman may pose, manage the entire conversation with the taxman, help you submit any required information and minimise the impact on your business or personal accounts.

“HMRC is continually embarking on new ways to target you using a range of approaches and new technology. We are constantly vigilant and we stay up to date with the latest advances, but you are still at risk of an investigation at any time. Taking out a subscription to our policy means that our fees are one less thing for you to worry about. We can defend you for as long as it takes to achieve the right result.”

Protect yourself today!

Tax investigations can be costly and our expert support during this process is not covered in your usual accountancy fees.

Investing a small amount into our Tax Fee Protection Policy now means that you will receive complete support if HMRC targets you, covering you for all the work we do on your behalf.

We will manage your case from start to finish, reducing stress and providing peace of mind.

Want to know more? Please get in touch with us today by contacting Black and White Chartered Certified Accountants, populate the “Got a Question” form on the right, or call us on 0800 140 4644.

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