Duration of HMRC investigations up 10% – can you afford not to be protected?

According to statistics released by HMRC, the time it takes for tax investigations to be concluded has risen by almost 10%. In 2016/17, the average time taken to settle a tax investigation was 34 months compared to 31 months in 2015/16. Our Bolton Accountants can offer Tax Investigation Insurance to protect you from HMRC.

The number of tax investigations are increasing each year and with pressure from HM Treasury to reduce the tax gap, HMRC is increasingly seeking to recoup more and more of this unpaid tax.

The heightened number of investigations combined with the increase in the average duration of any investigation is putting significant strains on businesses. If your business is subjected to a HMRC tax investigation you will be best prepared if you have a professional advisor by your side. HMRC investigations can significantly reduce the productivity of a business when management are left to deal with the matter alone, and without tax investigation service, accountancy and tax advisory fees can quickly escalate.

Nicola Roby at CHW Bolton Accountants explains why it is more important than ever to prepare and protect your business against tax investigations.

“An investigation from HMRC can result in a business being exposed to a period of financial and legal uncertainty.  Because of the tax gap, HMRC is increasingly unwilling to drop cases when technical points are disputed even though they sometimes present a weak case.

“HMRC follows a Litigation and Settlement Strategy framework when entering tax disputes, which can make it difficult for their teams to settle disputes for less tax than the full amount initially claimed. HMRC has increased its estimates of the amount of tax underpaid by large businesses to £24.8bn in 2016/17, up from £21.8bn in 2015/16 and they are determined on recovering it.”

The perception is that HMRC sometimes that lacks commercialism, choosing to dig its heels in for an amount they estimated, rather than a settlement which could be handled today. Businesses need to defend themselves against this attitude.

Whilst large corporates may have an in-house team to handle these matters, and a sophisticated and robust financial management system. SMEs on the other hand usually have a smaller resource, potentially leading HMRC to believe they can use their power as investigators due to a lack of awareness and knowledge, turning the whole thing into a fishing expedition as to what they can recover.

It is essential that a business has its advisor beside them when dealing with HMRC, to defend both the business and the line of questioning. We come across business who have been concerned about the costs and therefore have tried to deal with a HMRC investigation themselves. We have seen some ridiculous outcomes which could’ve been mitigated had we been involved.

Our advice is to make sure you have tax investigation service in place to cover the fees of your professional advisor in the case of a HMRC enquiry. For more information about Tax Investigation Service, please contact us via our enquiry form.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

Follow us

Tweets by @CHW-accounting

CHW-Accounting
@chw-accounting


Twitter: chw_accounting

Read enough?

Want to find out how we can help you and your business? Get in touch today and let's have a chat.

WHAT'S THE NEWS?

Grab a biscuit and a brew and read our latest news.

4 July 2019

VAT Reverse Charge

by

With a major shake-up in the treatment of VAT in respect of building work is imminent – our Senior VAT Manager, Carolyn Van Hecke, highlights the implications for those in the construction industry and why it has never been so important to apply the correct VAT treatment.


Read more >

20 May 2019

How long must I retain my books and records?

by

HM Revenue and Customs ( HMRC ) may check your records to make sure you’re paying the right amount of tax, but how far can they go back & how long should you keep business records?


Read more >

12 April 2019

Claiming back VAT on a vehicle purchase

by

You can usually reclaim the VAT paid on goods purchased for use in your business. However, with vehicles these often include an element of personal or private use. We explain the rules regarding reclaiming VAT on vehicle purchases.


Read more >

1 April 2019

Loans to employees – what you need to know

by

Whilst a business is perfectly entitled to loan money to employees or relatives, there can be tax implications if it does.  Here’s our brief reminder of those implications.


Read more >

28 March 2019

Guide to Payroll Changes from April 2019

by

If you are an employer there are several payroll changes which come into effect from April 2019 of which you should be aware.


Read more >

YOUR CHALLENGES

No matter what your challenge is, we’ve probably dealt with it before.



Need an Accountant?

Get in touch >


Need an Accountant?

Get in touch >


Tax issues?

Find out more >


Tax issues?

Find out more >


Trying to grow your business?

We can help >


Trying to grow your business?

We can help >


Managing cashflow?

We can help >


Managing cashflow?

We can help >


Starting a business?

We can help >


Starting a business?

We can help >


Looking for funding?

Need help with funding? >


Looking for funding?

Need help with funding? >


Buying or selling a business?

We can help >


Buying or selling a business?

We can help >


Adopt the cloud?

We can help >


Adopt the cloud?

We can help >


What else can we do for you?

We can help >


What else can we do for you?

We can help >
CONTACT US

Get in touch, no hard sell, just a brew, a biscuit and a chat.