Our Answers to Your FAQ’s - During a Tax Investigation Jump to the last phase ↛
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This depends on several factors
The information HMRC will ask you to provide will depend on what they are checking.
You’ll normally receive a letter telling you exactly what’s needed. You should be prepared to provide the information that your tax return was based on quickly and easily.
HMRC have extensive powers
SHMRC have extensive powers to request and obtain information from the taxpayer and from third parties.
They can issue determinations if there is no co-operation but this is always a last resort.
Disclose Voluntarily in advance if necessary
Voluntary disclosure takes place when a taxpayer discovers their own error or omission and reports it to HMRC.
Technically, HMRC can go back 20 years to ask for information if they need to and you are liable for any tax found to be due with related interest and penalties.
The penalties levied by HMRC depend on:
Whether the omission was reported voluntarily or not, the circumstances of the omission and the quantum of the omission. Penalties are now very much codified and difficult to avoid. The penalties are calculated on a published scale which takes into account the behaviour of the taxpayer. The penalty is therefore significantly higher if the failure to disclose is deliberate, and even higher if there is an attempt to conceal the lack of disclosure.
Typically a penalty can add another 15%-100%. An inadvertent mistake is likely to suffer a lighter penalty.
Disclosure report
You need to make full disclosure of any known omissions to HMRC.A formal detailed report is usually only required when an enquiry is opened under Code of Practice 8 or 9.
There are various disclosure regimes or facilities available such as Worldwide Disclosure Facility (WDF) or Let Property Campaign (LPC)
We are able to help as follows:
Collating information and ensuring the correct information is provided to HMRC.
Dealing with further requests for information.
Ensuring that HMRC do not extend an enquiry unnecessarily.
Helping to negotiate a final settlement including interest and penalties.
Helping to negotiate time to pay.
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