Our Answers to Your FAQ’s - Before a Tax Investigation Jump to the second phase ↛
If you have any questions or would benefit from impartial, confidential advice, please get in touch with our experienced tax investigation team today.
First Letter of communication is important
Read the letter carefully and seek professional advice if you are unsure or if it is a complicated request for information.
Our tax team have significant experience supporting individuals and businesses at this stage, so at this point you may wish to contact us for a no obligation, confidential consultation to discuss your next actions.
HMRC will not specifically say what triggers a tax investigation, however:
Sometimes it is obvious, like an omission picked up by HMRC. Sometimes it is random.
You may be in a HMRC target area – HMRC set up taskforces to target areas that are thought to be at high-risk of tax fraud. These maybe geographic and/or specific sectors, with property income being perhaps the most common. Have you done something to attract the attention of HMRC? This may be that your income is dramatically up and down or that returns are always late, or that you are claiming excessively high expenses in proportion with your income – all these things can make you high risk in the eyes of HMRC.
Some tax investigations finish with one letter
Other investigations can go on for months with HMRC asking for more and more information.
No, unfortunately you cannot appeal against an investigation being opened.
You should normally get an appeal right at the time of hmrc decision.
Technically, HMRC can go back 20 years but it is more usual for them to go back 6 years.
There are stringent penalties available.
They will prosecute in cases of deliberate fraud and particularly in cases where large amounts of PAYE and VAT are concerned.
It is possible to go to prison for tax offences but HMRC will usually seek civil penalties.
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