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Tax dispute resolution

Sometimes, HMRC enquiries do not involve any allegation of fraud but are simply challenges as to the way in which a particular item of expenditure or income should be treated for tax purposes.

Technical challenges

Although any tax return can be subject to enquiry, most technical challenges relate in practice to the computation of business profits. And with the increasing complexity of tax legislation and the pressures on HMRC to fill the gaps in the Chancellor’s budgeting, this kind of thing is becoming more and more common.

Technical challenges to the tax treatment of a particular receipt or expense are superficially less stressful than a challenge to your honesty. But if the amounts are substantial the effects on a business can be devastating, particularly if the matter relates to a number of years.

Perhaps the most obvious example is a status dispute, where HMRC seek to recategorise sub-contract workers as employees and to collect PAYE tax and national insurance contributions, often for a number of past years: but this is only one example of the kind of challenge that can arise.

Usually it is best and most cost-effective to settle any dispute without recourse to formal legal proceedings, and it is always our aim to do so if we possibly can.  Occasionally, however, we reach an impasse with HMRC and we will advise taking a case before the First-tier Tax Tribunal.

Sometimes, just the threat of taking such a step can bring HMRC back to the table; but such a threat has to be credible. Whatever the challenge, it’s good to know you have experienced tax professionals batting for you.

Insurance

BKL clients are able to take advantage of insurance at favourable rates against the professional costs of resolving tax disputes and also district-level investigations. If you are not covered and would like to have more information about the costs and scope of the cover offered, please get in touch.

For more information or help from one of our tax specialists, please contact us using our enquiry form.