Types of enquiries and investigations
Tax Enquiries and Investigations

FULL ENQUIRIES

A full enquiry seeks to address all the significant risks of error in a tax return, including the risk of the return being fundamentally incorrect.

It involves a comprehensive review of the underlying records and for businesses can include a review of the private financial affairs of the directors as well as the business records.

Full enquiries are very intrusive and it is important to understand when and if HMRC can ask for certain explanations and documentation.  

Full enquiries and investigations are often stressful for the taxpayer and it is important that the professional adviser is able to demonstrate that he/she has the appropriate tax knowledge and competency to take the taxpayer through the process, otherwise it invariably leads to a breakdown in trust between the taxpayer and the professional adviser and further add to the stress and worry of the taxpayer.

I have dealt with hundreds of enquiries over the years.  I am confident that with my abilities I can help you obtain a result which is both acceptable and manageable for you and your client.
ASPECT ENQUIRIES

An Aspect enquiry is one which fall short of a full, in-depth examination of the whole return and instead concentrate on one or more aspects of it.

HMRC's aim is to check that return is correct and complete and will look to establish the facts behind particular entries, obtaining explanations where those entries appear doubtful, and test those explanations, where appropriate, by reference to available evidence.

Aspect enquiries, although more limited in scope than full enquiries, should not be seen as any less thorough or investigative.

I can help resolve aspect cases using my extensive experience of dealing with cases over the years, understanding how HMRC operate and applying relevant case law to support a view.  I can also provide you with a second opinion (see below) on the strengths of HMRC's argument and any alternative counter arguments.

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PENALTY MITIGATION

HMRC can issues penalties in a number of circumstances.  These can include:
* where there has been a failure to notify HMRC that there is a tax liability,
* where a return has not been filed with HMRC
* where there has been an inaccuracy in a filed return

In most investigations and enquiries covering a number of tax years, HMRC will normally come to a contract settlement.  The settlement will cover the additional tax due, the interest and a penalty. Penalties in these situations are determined based on a percentage of the additional tax due.  The behaviour of the taxpayer ultimately drives the percentage of the penalty.  

The There are 4 different types of behaviour. 
Reasonable Care
Everyone has a responsibility to take reasonable care over their tax affairs. What ‘reasonable care’ is will depend on each customer’s abilities and circumstances.  If there was anything about your health or personal circumstances that made it difficult for you to take reasonable care, please tell the officer that is carrying out the check. Telling them will mean that they can take this into account when considering whether you took reasonable care. If you took reasonable care to get things right but your return or document still contained an inaccuracy, we will not charge you a penalty.  

Some of the ways which HMRC state you can show that you have taken reasonable care are:  
* keeping enough records to make accurate tax returns  
* keeping those records safe  
* asking HMRC or a tax adviser if you’re not sure about anything and following any advice given 

Careless 
This is where you failed to take reasonable care to get things right but your actions were not deliberate. 

Deliberate 
This is where you knew that a return or document was inaccurate when you sent it to us. 

HMRC examples of deliberate inaccuracies include deliberately: 
* overstating your business expenses   
* understating your income  
* paying wages without accounting for Pay As You Earn and National Insurance contributions 

Deliberate and concealed inaccuracies 
This is where you knew that a return or document was inaccurate and you took active steps to hide the inaccuracy from HMRC, either before or after you sent it to them. HMRC state that an example of taking active steps to conceal an inaccuracy is where you create a false invoice to cover a non-existent stock purchase. 

I have had great success securing HMRC's agreement to penalties where they accept that the taxpayer took 'reasonable care' or were merely 'careless'.  In case where HMRC have been able to demonstrate that the client had been 'careless' I have still be able to get HMRC to suspend the penalties on favourable terms.

If you or your client are having problems negotiating a settlement with HMRC, I can help.  Using my 20 years experience and my knowledge of relevant and recent tax cases I can help secure a positive outcome.
SECOND OPINIONS

You may have a case where you are convinced that you or your client is correct but HMRC are still continuing to assert an opposing position.  A fresh pair of eyes can sometimes spot opportunities that have gone unnoticed.  It is possible that you or the inspector have become 'bogged down in the detail' of the case and it needs someone to take a look at it anew from a strategic view point and bring the case back on track.

Whilst we all want to do the utmost for our clients, sometimes we can be too close to the action and a second pair of eyes can impartially evaluate the strength of an argument or provide alternative solutions.

If you have a case which you would like someone to take a look at to evaluate, get in contact and I would be happy to look over the facts and provide an opinion.
CONTACT ME and see if I can help
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