HMRC Enquiries

Opening stage

Tax is complicated. Self-assessment enquiries are not immune from that complexity so it may be that technical or procedural errors have been made by HMRC which an experienced specialist can identify. These may appear small, but they can impact on the chosen strategy and the validity of the entire enquiry.

During an enquiry

An enquiry inevitably means HMRC asks for documents, information, explanations and supporting evidence.

HMRC does not have an automatic entitlement to see everything even if it relates to tax, the data must be ‘reasonably required’ in order to check the tax return under enquiry. HMRC might, for example, question historical transactions or ask about the affairs of other, perhaps related, parties such as close family members or subsidiaries of a holding company under enquiry. Detailed knowledge of the relevant legislation, case law, taxpayer's rights, safeguards and boundaries is vital.

A robust response to HMRC may be merited but sometimes it could be helpful to volunteer data; years of experience spent specialising in HMRC investigation work help inform such judgement calls.

Closing an enquiry

If adjustments are found, HMRC will issue a formal closure notice making those amendments, which can be appealed if there is still disagreement.

Depending on the nature of any amendments HMRC might seek to raise assessments to collect tax for other years, or issue tax based penalties which can also be appealed. Again, the rules and case law on this are complex.

If HMRC refuses to close an enquiry, the taxpayer has the right to ask the First Tier Tax Tribunal to order that a closure notice is issued. This can be a powerful tool if used appropriately in the right circumstances.

All types of enquiry should be taken seriously. We can help guide you through the complexities, to ensure that you comply where necessary while preventing HMRC from 'over exercising' their powers, so that HMRC's concerns can be addressed and ultimately resolved.