Why you need to protect yourself from an HMRC investigation

A tax investgation is a nasty business. It’s stressful, time consuming and usually very expensive. And it could easily happen to you.

It happened to one of our clients, but luckily, he’d taken out our Tax Investigation Protection.

18 months of stress and a £20k tax bill??

In a nutshell, our client received what seemed at first a simple enquiry from HMRC, beginning with just a few questions.  This enquiry then turned into the tax inspector looking at the IR35 rules on the basis that the company’s consultant bookkeeper should actually have been an employee.

The inspector visited our client’s premises – as well as our offices here at The Retreat! One thing led to another…

Once the IR35 query had been resolved, the inspector brought into question some company costs that had been claimed, and disputed whether these were allowable. He then looked at whether there were any benefits received by the employees that would be subject to the Benefit in Kind tax.

This enquiry went on for over 18 months! As you can imagine, it involved multiple visits, calls and lots of letters back and forth from us. The inspector had claimed that the client was liable for £20,000 tax that had not been paid, but with our persistent and constant reasoning and justifications on our client’s behalf, this was eventually reduced to nil and the case closed.

The cost

Our time involved in the meetings, calls, investigation and correspondence came to £2,600. But as our client had signed up for our Tax Investigation Protection – which we claimed back from their insurers, there was no extra cost to the client – nothing, zilch, nada.

Why is this happening?

HMRC’s investigations are more focused than ever before. During the tax year 2017-18, the tax man collected over £30 BILLION through ‘compliance activity.’

Special investigators using high tech methods gain information to maximise tax revenues. As an example, they review the kind of innocent enquiries people make, and then look into whether they’ve paid too little tax. Even if you’ve done nothing wrong, you can be selected at random… In other words, they’re targeting people like you and businesses like yours to bring in more money!

How we help

In the upsetting event that HMRC targets you, we’ve got your back.

Our tax investigation service means we can defend you without you worrying about the cost. We’ll:

  • Liaise with HMRC on your behalf
  • Prepare and defend your case
  • Handle all correspondence and meetings with the tax inspector
  • Provide full representation
  • Give you 24/7 access to a busines legal helpline that covers employment law, health and safety and other commercial matters.

You’ll have the peace of mind that the professional fees are covered.

Reasons to act now

  • Tax investigations can happen to anyone, whether you’re an individual or in business.
  • Even if you’ve done nothing wrong, you can be selected.
  • HMRC’s focus has changed and the main goal is to maximise revenue.
  • HMRC has access to a very wide pool of data, including banks, building societies, property-based information, letting agents, mortgage applications, DVLA, overseas tax authorities and more.

We can’t take away the stress of being under investigation, but we can certainly remove the cost. And whilst we cannot guarantee that the outcome will always be nil tax payable, we can promise that we will use all of our resources to ensure you only pay the correct tax and nothing more.

Hit the contact button to protect yourself and your business now.