Tax Investigation Compliance

The most important thing to remember whenever going through a tax investigation by HMRC is to get professional representation.

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Opening a Tax Investigation

When HMRC open a tax investigation into your tax affairs they will send you a letter and normally ask you to supply them with a range of business records.

Do not submit anything before appointing a tax investigation expert or even contact HMRC until you have had professional tax investigation advice and ensured your interests are protected.
The first few days after receiving a letter from HMRC are the most important days in a tax investigation which can stretch over a two year period. If not longer.

During The Course of The Tax Investigation

Livingstones will negotiate with HMRC on your behalf so that you no longer have any direct contact with HMRC during your tax investigation.

This will enable you to carry on living your life without the added stress of waiting for the next dreaded letter from HMRC to come through your door.

Throughout a HMRC tax investigation, the inspector is likely to ask for additional records and information. We will receive these requests and if HMRC can legally ask for them we will then request them from you.

Negotiating a Settlement

Livingstones will negotiate with HMRC during your tax investigation to calculate the outstanding tax due.

If you do owe additional tax you will be liable for a HMRC tax penalty but it is our job to get you as low a tax penalty as we can, and a fair one at that.

If you do not owe HMRC a penny then we will prove that!

It is so important to appoint a professional tax investigation adviser to deal with your tax investigation as they are used to negotiating with HMRC.

Appealing Against HMRC

We will never agree a tax settlement if it is not legal and enforceable.

The End of A Tax Investigation

Once all the their checks have been completed, there is only one final hurdle to jump.

Paying Your Tax Bill

Pay this and enjoy life without having a stressful tax investigation hanging over your head.

Do you fear a tax investigation?

Many small to medium sized business owners dread an HMRC investigation and that’s no surprise – tax investigators have a reputation for making their own assumptions and not brooking any arguments.

But that’s unfair, to a point. Not because investigators aren’t sometimes draconian, but because qualified, experienced accountants CAN argue with HMRC, present a case and prove it. With our help, appeals can be made against judgements and they can be overturned if there’s evidence that HMRC has drawn incorrect conclusions.

Being under investigation is very stressful, whether it’s to ensure compliance or because there’s suspicion of infringement regarding income tax, VAT or any other form of business taxation. Business owners rightly worry whether they have all the correct documentation, that their accounts are in order and whether or not they might implicate themselves unwittingly because they don’t thoroughly understand the situation.

If you have received a letter from HMRC warning of an impending tax investigation, getting the help of experienced tax negotiators is vital, and the earlier the better. We can help with creating missing accounts or analysing previous accounts to present an accurate picture to HMRC.

HMRC often relies on the fact that business owners aren’t that well informed about the extent of its powers. Livingstone Accountants can field all requests from HMRC and ensure that the correct response is given. Some requests for information may overstretch HMRC’s powers and rights; we will advise you on the information that you are obliged to give out.

The early period of an investigation, the receipt of the first letter from HMRC, is all important. Your initial response can set the tone of an investigation that can last for years. Get in touch now.

Call on (020) 8903 9538 and we’ll take steps to alleviate your stress and worry.

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What our clients say

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Jimmy Lagos,Arena Restaurant

If you follow these rules you should survive a tax investigation – and may even do so with your sanity intact!

Our Top 10 Tips For Tax Investigation Support

1. KEEP CALM!

An investigation often provokes a number of violent emotions in those under scrutiny – not least sheer terror at the thought of ending up in jail. In reality, very few cases end in a custodial sentence. So there’s no need to expect the worst.

2. GET EXPERT ADVICE AT THE OUTSET

If you are being investigated by HMRC, it is highly recommended that you seek out independent advice from Livingstones. We have been dealing with cases for over 20 years, so we know how to speak to investigators. You will need somebody on your side who understands the jargon and knows how HMRC operates who can take some of the emotional strain from your shoulders. It’s also likely to be cheaper in the long run.

3. DON’T DISCUSS YOUR TAX AFFAIRS WITH ANYONE BUT US!

Tempting though it might be to offload your woes at the pub or the golf club, it’s never a good idea – unless you want the whole town to know the details of your case; and that might include a taxman. It’s also almost certain that what your friends advise you will be wrong and therefore detrimental to your chances of reaching a settlement with HMRC.

4. DON’T LIE TO HMRC

This is the simplest and most reliable way of avoiding that jail sentence!

5. DON’T ASSUME HMRC IS IGNORANT OF ANYTHING

An HMRC investigator has a huge number of resources at his disposal and is not afraid to ask questions. As the book says “Stick with the wartime advice: ‘Careless Talk Costs Lives’. Letting a former flatmate know that you paid for your house in the Dordogne in cash is not literally going to kill you. But it may cost you the chance of getting a good deal with the taxman should he begin investigating your affairs.”

6. BE WELL PREPARED FOR ANY MEETINGS

Remember the motto “no one prepares to fail – they fail to prepare”. It is pointless trying to evade the HMRC’s questions with insufficient preparation – the investigator will simply use his statutory powers to force you to give him the answers he seeks and your lack of preparation will be deemed to be “lack of co-operation”.

7. MAKE SIGNIFICANT (BUT RELEVANT) PAYMENTS ON ACCOUNT

HMRC sees this as an important sign of a willingness to co-operate. It may also save you a huge amount in interest, which accrues from the date when the tax should have been paid to the day it is actually paid. On the other hand, overpayment of the outstanding liabilities may lead HMRC to an unrealistic expectation of the amount you owe.

8. DON’T TRY TO DESTROY EVIDENCE

It’s usually unhelpful. If you don’t have the appropriate records, HMRC may assume you are trying to hide something when you are not.

9. NEVER MAKE A PARTIAL DISCLOSURE

Do not suffer from selective amnesia when disclosing information involuntarily – this is particularly distasteful to HMRC and is likely to lead to a more punitive settlement since the HMRC will take into account your lack of co-operation when determining the penalty you have to pay as part of your settlement.

10. ONCE YOU HAVE REACHED A SETTLEMENT, DON’T OFFEND AGAIN

HMRC will view those who offend a second time in a much more serious light.

Looking to find out more?

We consistently monitor our clients business to make sure they are on the right track. We want every business to flourish, therefore, you hear from Livingstones Accoutants more than just once a year.

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