We have extensive experience managing HMRC enquiries and tax investigations. We are recognised as industry-wide tax investigation specialists. We have recently acted for several clients with various tax issues including:
- Valuations on incorporation of a business
- Validity and tax treatment of income and gains received through an offshore structure
- Undeclared transactions for a property trader
- Eligibility of film tax credit relief
- Alleged missing trader (MTIC and MTEC) VAT fraud
- Expense accruals for guaranteed income streams
- Undeclared income received through online trading
- 2019 loan charge
- Redirection of rental income to limited company
- Undeclared cash taking for restaurant business
- Undeclared sales of second hand cars
- Unauthorised surplus asset charge
Tax investigations often commence through seemingly innocent checks. A business may have been subject to a PAYE audit or a VAT check. A PAYE audit or VAT check permit HMRC to obtain valuable information to identify whether there are other tax irregularities with the business and often the business owners. Similarly, a tax investigation can start with a self-assessment tax return enquiry. However, random enquiries are rare and are undertaken to ascertain the size of the hidden economy. It is unlikely your tax enquiry is random. It may be difficult to identify or accept there is something wrong, although it is better to address the issue in an appropriate manner to avoid escalating penalties and the risk of prosecution. We can assist in managing HMRC enquiries and more in depth HMRC investigations.
When an enquiry escalates or a tax risk is identified we can help you decide whether it is sensible to request the contractual disclosure facility. We will work with you to identify tax risks and what HMRC are concerned about. HMRC are able to obtain considerable information to identify tax risks and we can discuss what is potentially in their position and what they most likely already know.
We will explain HMRC tax investigations in an easy to understand way, support and thoroughly defend you throughout the enquiry or disclosure process. Our role will be to identify and obtain the best settlement for you by presenting robust technical arguments, mitigating your potential tax liability, penalties and interest.
Tax disputes can often prove traumatic and time-consuming. Without expert familiarity with HMRC procedure and comprehensive technical knowledge of counter arguments you may face excessive liabilities to tax, interest and penalties. We will ensure the smoothest and most pain-free process possible.
We specialise in:
- UK tax disclosures to HMRC
- Contractual disclosure facility
- Code of practice 9 (COP9)
- Code of practice 8 (COP8)
- Managing MTIC and MTEC enquiries
- Accelerated payment notices
- Self-assessment tax return enquiry
- VAT checks
- PAYE audit
- Employment tax check
- National minimum wage investigations
- Visits to business premises by HMRC
Case study 1: Solar panel installation
An associate introduced us to a company responsible for selling and installing solar panels. The business had grown rapidly, however, the company received a number of offers for payment in cash. The company had also found it difficult to maintain records due to its growth. PAYE payments and VAT refunds were poorly managed and whilst HMRC owed input VAT to the company, they had refused paying it whilst other tax liabilities remained outstanding. The owners of the business had also undertaken aggressive avoidance planning to extract funds from the company. We sought to register our clients under code of practice 9 to protect them from prosecution. We assisted the preparation of a full disclosure report and undertook settlement negotiations. We represented that the schematic planning could not have been implemented because certain resolutions were legally void. We also agreed a release of VAT and an ongoing payment plan in respect to potential liabilities to improve cash flow. A disclosure of all irregularities was provided and a settlement agreed.
Case study 2: Pension liberated
A client had undertaken planning introduced by his advisor to extract funds from his pension and place them in a vehicle intended to be efficient for IHT purposes. We agreed with HMRC that given advice had been provided, the client should be within Code of Practice 8 – rather than suspected of fraud. A full disclosure was prepared to HMRC and negotiations followed regarding whether an unauthorised payment had arisen and if so whether it attracted the additional surcharge (15%). We sought approval that the case should be dealt with under Code of Practice 8. We reviewed over ten years of records and submitted a disclosure. We entered into a favourable negotiated settlement.
Case study 3: Offshore trust
Following the demise of a client’s father, it transpired his assets had been held within an offshore trust and income and gains realised had never been disclosed to HMRC. The family members desired bringing an end to the structure and receiving assets personally. The case was registered under the contractual disclosure facility and a disclosure prepared and submitted. Due to legislative changes over the period of the trust and the availability of records, a negotiated settlement was entered into resulting in a mitigated settlement.