TAX enquiry. Two words which for businesses and individuals alike can be the catalyst for a period of stress and strain.
Anyone receiving notification from HMRC that their tax affairs are the subject of an enquiry will naturally have concerns about the process they face.
But an enquiry need not be an ordeal. The key is to be prepared and ensure you receive the best possible advice.
Tax enquiries are more common than many people realise, both for individuals who complete personal tax returns and for businesses.
Businesses can be the subject of a partial enquiry on average every five years, but a full enquiry is a different process.
They can be triggered by late returns or suspected inaccuracies – in some cases they may even be the result of a tip-off the HMRC has received from an outside source or because you belong to a group or demographic which has been assessed as posing a risk by tax authorities.
When you consider the UK tax gap is estimated to sit at £34billion it is understandable that there is a very proactive approach from HMRC.
In general terms, by filing accurate and timely accounts and tax returns you should avoid the stress of an enquiry but the reality is there are no guarantees that you will not find yourself subject to one.
Whatever the reason for the enquiry being instigated, what follows is a very thorough and rigorous examination of the figures in question.
At James Milne we have a specialist tax investigation package which covers clients from all walks of life, both personal and businesses, and that provides those we act for with peace of mind and the knowledge fees incurred whilst dealing with an enquiry will be covered.
The role of an accountant is to support those going through the process and to ensure the best outcome by working closely with them and HMRC.
Tax enquiries can be carried out at any time in the year and those exposed will be notified in writing before contact from an individual inspector.
HMRC has the right to inspect all relevant documentation and to request further information on areas of interest.
The key from our perspective is to ensure the accounts and tax returns submitted are accurate in the first instance, so if existing clients are the subject of an enquiry we are confident of the outcome because we have prepared those figures and know the background.
There is nothing to fear if you are confident your affairs are in order.
An enquiry is not a one way process and we work hard to ensure open dialogue with inspectors, which helps clarify the situation and clear up any issues which may arise.
Our message to anyone who is subject to an enquiry is quite simple - don’t panic, but do seek professional advice as early as possible.