A HMRC tax investigation is a formal review carried out by HMRC to ensure that an individual or business has accurately reported their income and paid the correct amount of tax. These investigations may be triggered by discrepancies or irregularities in financial records, or they may be selected at random as part of HMRC’s routine compliance and enforcement activities.

HMRC tax enquiries and compliance checks determine whether tax returns and other information submitted to them by a taxpayer are correct. These enquiries and checks can cover a particular aspect of a return, or all areas of a person’s tax affairs. HMRC commonly undertake cross-tax enquiries covering corporation tax, VAT and employer duties to check a company’s tax affairs.

Today HMRC have access to an enormous amount of automatically collected data. A large number of tax investigations are undertaken because HMRC consider there may be a mismatch in information they hold and what the taxpayer has reported. Whilst many enquiries can be resolved quickly, unfortunately, some become protracted where HMRC’s concerns are not addressed in a comprehensive but succinct manner.

We’re experienced in understanding the underlying risks HMRC are trying to address, narrowing the scope of enquiries and progressing matters to conclusion as quickly as possible.

For assistance with a new HMRC enquiry or a fresh pair of expert eyes for an existing enquiry, please get in touch.

HMRC have the backing of legislation to focus on tackling tax avoidance schemes more aggressively and effectively.

They claim to have won over 80% of tax avoidance cases in the Courts.

Most recently, HMRC have been cracking down on tax avoidance arrangements that they consider were mostly sold via promoters including Minerva Services Ltd and Buckingham Wealth Ltd and termed ‘Baxendale-Walker schemes’.

If you have participated in a tax scheme, you may be questioning whether to withdraw from those arrangements and seek settlement with HMRC before further litigation takes place.

We can help by:

• Reviewing any tax avoidance arrangements to establish the risks and range of outcomes
• Advising you on settlement options with HMRC
• Managing the process through to settlement, including agreement of a Time to Pay arrangement with HMRC to settle any eventual liabilities, if appropriate

For advice on your options in relation to a legacy avoidance scheme, please contact us for a confidential and no-obligation discussion.

Serious civil investigations are conducted by HMRC’s Fraud Investigation Service (FIS) and generally fall into either:

• Code of Practice 8 –where HMRC expect a large tax liability but do not suspect fraud has occurred. COP8 enquiries generally involve complex tax issues and/or tax avoidance.
• Code of Practice 9 – where HMRC suspect tax fraud has been committed and criminal prosecution is possible. With a view to investigating the matter on a civil, rather than criminal basis, HMRC offer taxpayers the opportunity to disclose any tax irregularities under the Contractual Disclosure Facility.

If you’re facing a COP8 or COP9 investigation, their invasive and lengthy nature means it is imperative to have an adviser with specific experience from the outset.

Applying our specialist understanding of serious tax investigations, we can help you to manage the disclosure process , to minimise the financial and reputational repercussions. Please get in touch to find out more.

When you realise there is an error on your submitted tax returns, or you have not notified HMRC of your tax obligations on time, making a voluntary disclosure to HMRC is the most effective way to bring your tax affairs up to date. A well prepared and appropriately placed disclosure can alleviate a great amount of stress and effort.

By disclosing any problems to HMRC before they identify the issue themselves, our tax dispute & resolution specialists can manage how HMRC view the matter, as well as mitigating any penalties that HMRC may seek to charge.

For a confidential discussion about making a voluntary disclosure to HMRC, please get in touch.

On occasion, tax disputes can become protracted with no resolution in sight. When this occurs, an effective course of action is to engage in Alternative Dispute Resolution (ADR) with HMRC.

ADR is a range of methods to resolve difficult disputes. ADR often includes a formal mediation process, where a mediator manages a discussion between the taxpayer and HMRC to explore ways to resolve the dispute.

ADR may be applicable in the following circumstances:

• Breakdown in communication between the taxpayer and HMRC
• Lack of access to direct discussions with HMRC specialist.
• Misunderstanding of facts or more generally
• Uncertainty over why certain information or evidence is being used to form a view when there is alternative information or evidence available
• Use of assumptions which one party considers inappropriate

Our Tax Risk and Dispute Resolution specialists include Jessica McLellan: an experienced accredited mediator who has extensive knowledge of the ADR process and has supported a wide array of clients throughout this process.

For a confidential discussion about your situation and whether ADR could help you, please get in touch with us.

The rules regarding the taxation of foreign income and gains in the UK have become increasingly complex over the years. Many UK residents are unaware that, unless they are non-UK domiciled, they must declare their worldwide income and gains to HMRC. If you’re non-UK domiciled, it’s important to carefully consider your reporting obligations in the UK.

Given these complexities, HMRC are actively targeting offshore assets and income as a perceived area of tax non-compliance. As part of this HMRC have:

• An extended period of time to assess additional taxes where there is an offshore element
• Increased penalty powers (can be up to 300% of the tax due)
• Strengthened their co-operation with overseas jurisdictions for information gathering purposes
  Intelligent use of data analysis from ever growing sources
• Brought in wider reaching legislation to target individuals, companies and even officers of a company

If you have overseas income and gains that have not been reported to HMRC on tax returns or areas of technical complexity, specialist advice can ascertain whether a disclosure to HMRC is required to bring your tax affairs up to date.

Our tax dispute and resolution expert are familiar with HMRC’s powers and experienced at managing offshore disclosures.

Please get in touch for a confidential, no obligation discussion about regularising your UK tax affairs in relation to offshore income and gains.