Frequently Asked Questions

What is a tax investigation?

A tax investigation can vary from an enquiry into a missing record to something a lot more severe. However, a tax investigation is prompted by HMRC because they believe there has been some form of suspicious activity in an attempt to avoid paying the right amount of tax and so will be looking to reconcile your paperwork and records with your earnings.

Why have I been selected to be investigated?

Many tax investigations relate to the accuracy of tax returns which are filed by businesses and individuals. HMRC may believe you have not paid the correct amount of tax either due to gross negligence or fraud and so will be assessing various elements of your business; economic and risk to conclude a settlement amount.

How long will a tax investigation take?

All tax investigations can vary depending upon the complexity of the case, so there is no agreed-upon timescale. We will try our best to ensure that you are kept up to date with all developments throughout the process. 

How far back can HMRC investigate?

HMRC can ask for paperwork and records which go back 20 years which is dependant upon the severity of the case at hand. This is why it is vital to ensure you maintain and keep all your records.

What am I being investigated for VAT?

VAT investigations can take place when HMRC suspect the right amount of VAT is not being paid by the relevant business at hand. A VAT investigation can be carried out due to suspicious activity HMRC may have suspected or at random.

What is the process for a tax investigation?

The process for a tax investigation will depend on the nature of the enquiry and the complexity of the case, with there being different procedures for Code of Practice 8 (COP 8) and Code of Practice 9 (COP 9).

What about interest and penalties?

HMRC will charge you interest on any taxes that you have underpaid from the original due date through to the date the tax is paid in full. You may also have to pay a penalty for the underpaid tax.

Will I go to prison?

Criminal prosecutions only take place when a serious type of fraud has taken place to avoid paying the correct amount of tax to HMRC. This is rare, and co-operating with HMRC will ensure a settlement amount can be agreed upon to prevent any further legal action.

Still can’t find what you are looking for? Contact us.

HMRC Anti-Money Laundering Service

 

Registration Number: XSML00000155164

Address

International House

61 Mosley Street

Manchester

M2 3HZ

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