The current state of the UK economy has put significant pressure on HMRC to recover additional tax revenue in order to help them meet the growing deficit in the economy. Obviously, one way to achieve this goal is by carrying out additional enquiries into Tax Returns. Enquiries can be more complex than in the past and the costs of responding are consequently higher. From April 2009 the Finance Act 2008 granted HMRC a new raft of investigative and challenging powers, so it is increasingly important for clients to obtain protection against those costs.
We do have considerable expertise in defending clients under enquiry by HMRC and always ensure Returns are filed in a manner that should limit the possibility of an investigation. However HMRC select thousands of cases a year for random enquiries. If you are selected for a tax enquiry we will naturally aim to settle it quickly and minimise the final tax liabilities. However, answering all of HMRC’s questions takes time and the process could take several months. As a result the costs to defend you can be significant.
To provide peace of mind, we run a Tax Enquiry Fee Protection Service. The Service is backed by an insurance policy under which we can claim the costs of defending clients. HMRC’s statistics show that an additional £12 billion was raised from investigations and compliance activities last year and the government has confirmed that more will be undertaken in the coming tax year. In order to support you we have enhanced our service this year to make sure you are protected against most types of enquiry.
Just recently HMRC have announced that they will investigate up to 50,000 business records, beginning in the second half of 2011. We have recently discovered that these checks have now started and it means that your records could be investigated by HMRC.
You should have received a recent letter from us about our enhanced tax enquiry protection service and if you don’t currently subscribe we strongly recommend you consider joining this year. For more information, please contact our Tax Team by email, or call 01245 495588.
