Tax Enquiries & Investigations

A Tax Enquiry is when the Taxman investigates your affairs and can cover all aspects of your financial affairs. Take as much hassle as possible out of an Enquiry by using Tax Returns Direct.

The terms "Tax Enquiry" and "Tax Investigation" broadly mean the same thing – the Taxman is looking into to your tax affairs either for one year or for several years. The term “tax enquiry” is used below to cover all tax enquiries into your affairs.

If you are the subject of a tax enquiry sim[ply call us on FREEPHONE 0800 707 6058 for a confidential no obligation chat about your case or use the enquiry sheet on our Contact Us page.

If you would like to find out more about tax enquiries and investigations please read on.

A Word of Warning

Some of what you will read on this page is quite sobering and perhaps a little depressing... but please read on if you have a tax enquiry. You have nothing to lose.

If you are involved in a tax enquiry you really need to get professional help. You cannot beat experience when it comes to dealing with the Taxman on tax enquiries.

The chances are, if you try to deal with a tax enquiry yourself the result will be worse than it could otherwise have been, and it will be very stressful for you and your family.

Even though you should engage an adviser always stay involved and up to speed.  Be prepared to do the detailed research yourself which you can then hand over to your accountant or tax adviser.  You will save time and fees in doing this but crucially you will always have control over the stage that the enquiry has reached.  Your research is also likely to be more targeted if you give it proper detailed consideration.

Remember – you know yourself better than anyone else.  Don’t just leave it to your advisers. Get involved.

Be Prepared

In short - tax enquiries are never good news.  Even if you end up with a “good result” you will have professional fees to pay.

Tax enquiries are also stressful not just for you – but for your family as well.

Face Reality

If you have a tax enquiry you have to deal with it.  The Taxman won’t go away. The sooner you deal with it – the sooner it ends.

The worry is nearly always worse than the reality so don’t make it worse by ignoring it.

A common question that people ask – and it does seem to haunt them - is “how did the Taxman find out about this?”

Most of the time the Taxman will not say, but sometimes it becomes apparent as the enquiry proceeds.  In any event, it usually is not relevant – the fact is the enquiry has started and has to be dealt with.

What Does A Tax Enquiry Result In?

In the overwhelming majority of cases there is some extra tax to pay but this is by no means always the case.  The Taxman can get it badly wrong sometimes.

If additional tax is established (plus class 4 national insurance if a trade is involved) the tax is increased by interest and penalties. Interest is self explanatory but the penalties can be up to 100% of the tax for neglect. Discounts are available on penalties based on certain factors.

The penalty regime changed on 1 April 2009. The rules relating to penalties are different before and after this date.

The objective is to obtain the best overall settlement.  That is the name of the game.

It is very important to ensure that the settlement includes everything and that all years are brought into it.

Payment Of Any Settlement

If you owe the Taxman money after a tax investigation has been concluded then he will be looking to get paid.  If you have money he will expect you to hand that over. Additionally you will be expected to borrow the money to pay the debt if you are in a position to do so.

If you believe that you will be unable to discharge the debt in full or by borrowing then you must consider this before you agree any settlement.  If you are looking for a “time to pay arrangement” then this need to be negotiated before agreeing the settlement.

Identify The Problem

The Taxman will have to set out in writing what his concerns are.  Your adviser should also speak to the Taxman as useful information can be gleaned from such a conversation.

Always Keep Yourself Aware Of What Is Going On

You don’t need to be a computer expert to know that there is something wrong with your computer – but you will know when to call in the experts and they can explain the technical stuff to you.  You will also chase them to get your computer back again working as normal.

Exactly the same principle is true of your tax enquiry.  Keep on the case – don’t let it go.

Do The Donkey Work Yourself

Always ask your adviser to send you copies of the letters that he receives from the Taxman on your case.

Leave the technical stuff to your adviser but start to do the donkey work yourself.  It will pay you to take a few days off work and sit down and plan exactly what you need to do.  You may need to order copy banks statements etc.  List out what you need PRECISELY and set about getting everything together.

When you are writing to banks or other organisations for copy information be specific with account numbers and dates etc.  Keep copies of all requests that you make and send everything recorded delivery.  That way it should get dealt with.

Request that all information is sent to you in the first instance so you can be sure that you have received everything that you ordered.

Once you have everything you can then start to analyse the data so that you can present you accountant or tax adviser with details which will assist him in fighting your corner.  Look at all the information yourself and crucially start to THINK.  Really apply your mind - what can you see that you can bring to your adviser's attention?

By doing this not only will you save your adviser's time and reduce the fees you pay but you will also be in a position to give more meaningful responses which can only benefit you.

It also shows your adviser that you are serious about wanting to resolve the tax enquiry.

Finally

All of the above might sound a bit depressing but your adviser will always be on your side and see things from your point of view – at least he should do! (By the way – if you feel that your adviser is not up to it…. then do yourself a favour and get a new adviser …FAST).

Always remember - tax enquiries do end.  The Taxman wants the case concluded as well.  Keep this at the fore front of your mind.

Some people cope with the fallout from a tax enquiry better than others.  There is little point making yourself ill over it.  What is done is done – accept it.

Just make sure you learn from the experience and get on with your life.

Resolve a Tax Enquiry Now

If you would like us to discuss a tax enquiry or investigation on an entirely confidential basis please just give us a call on the FREEPHONE NUMBER 0800 707 6058. We would be delighted to be of service.

We know the how to deal with tax enquiries and what works. Don't let them get you down.