Every year HM Revenue and Customs (HMRC) open enquires into a vast range of HMRC Tax Investigations and have almost unrestricted ability to do so.

Some enquiries amount to nothing, and result in HMRC confirming the taxpayers return is correct. Sometimes however the tax enquiries can lead to a long and lengthy enquiry ending with the tax payer owing more tax, late payment interest and penalties.

Edge Tax can help you mange any types of HMRC tax investigation.

We act on your behalf to make the process easier.

Our aim, whatever the investigation is for is to arm you with support and to use our expertise to deal with HMRC.

Our team of tax experts deal with HMRC on all aspects of enquiries from technical matters, negotiating payment plans to asking for more time to look into the enquiry. We are your gate-keeper to keep the pressure off you.

Whilst based in the City of Bristol, our clients reside all over the UK. We have clients in Sunderland, Preston, Warrington, Bolton, Manchester, Nottingham, Birmingham, London, Cardiff, Bristol, Bath, Southampton and Yeovil to name a few places. We are happy to meet our clients in person and we will also hold regular virtual meetings

Industry leading experts in:

  • HMRC Compliance Checks into individuals, partnerships and companies
  • Suspected serious tax fraud – Code of Practice 9 (COP9), Contractual Disclosure Facility (CDF)
  • Code of Practice 8 (COP8) enquiries such as  remuneration trusts and offshore interests
  • HMRC disclosure facilities including Worldwide Disclosure Facility (WDF), Let Property Campaign (LPC) and any other voluntary disclosures

How Edge Tax can help with HMRC Tax Investigations

We can assist where you need to put things right, whether HMRC have been in contact, or not.

  • We understand that things go wrong and are non-judgemental in reviewing the behaviours which may have lead to any underpayment of tax
  • We are experts in dealing with tax investigations and can assist with the process from start to finish, liaising with HMRC on your behalf
  • We provide easy to understand advice on your options
  • We ensure that all HMRC correspondence, including the disclosure is completed and submitted on time, managing both yours and HMRC’s expectations
  • Deal with all aspects of follow up work
  • Provide full support and assistance representing you to HMRC
  • Advise on making voluntary disclosure in relation to any tax fraud committed where appropriate
  • Fixed fee proposals

Serious suspected Fraud

The fraud investigation service (FIS) was established in 2015 as an amalgamation of the Criminal Investigation Unit and Special Investigations Unit

Compliance Enquiries

HMRC have the ability to open enquiries into a broad range of tax matters (income tax self-assessment, corporation tax, VAT, PAYE).

Nudge Letters Explained

Receiving a nudge letter does not necessarily mean a previously submitted tax return is incorrect.

HMRC disclosure opportunities

Receiving a nudge letter does not necessarily mean a previously submitted tax return is incorrect.

Serious suspected Fraud (Code of Practice 9)

The fraud investigation service (FIS) was established in 2015 as an amalgamation of the Criminal Investigation Unit and Special Investigations Unit.

HMRC investigations under  COP9 (or the Contractual Disclosure Facility) are serious, invasive and time- consuming. They are also, generally not started unless HMRC have a reasonable suspicion that there has been a fraud which has led to an underpayment of taxes.

For there to have been fraud, there must have been deliberate behaviour.  This means that HMRC can look into the past twenty years of your tax affairs and those of connected entities.

We have vast successful experience dealing with investigations under  COP9 and are well placed to assist with the review of information, technical analysis and negotiation with HMRC. We deal with HMRC throughout the process to bring their enquiries to an end as quickly as possible causing a little disruption to you.

HMRC Compliance Enquiries

HMRC have the ability to open enquiries into a broad range of tax matters (income tax self-assessment, corporation tax, VAT, PAYE). Occasionally these enquires can lead to HMRC confirming that the taxpayers return is correct.

However, they can lead HMRC to ask further questions into connected tax matters and lead to a detailed and lengthy enquiry, resulting in more tax to pay, interest and penalties.

Instructing an experienced professional at the outset of an enquiry can minimise the risk to you by potentially limiting the aspects enquired into and the number of years in question.

Nudge Letters

Receiving a nudge letter does not necessarily mean a previously submitted tax return is incorrect.

There may be an innocent explanation or indeed in cases we have seen, there had already been full and complete disclosure.

The purpose of the nudge letter is to prompt the taxpayer into reviewing their tax returns and finances and checking whether further income, gains or profits have been correctly notified to HMRC.

HMRC use nudge letters to try and close the UK tax gap between what has been paid and what they believe should have been paid by individuals and businesses (based on land registry, automatic exchange of (offshore) information, business listings, social media, bank balances, and other business operating in similar trades).

Any individual who needs to make a disclosure of undeclared income or gains in respect of their personal or business affairs should consider making a disclosure as soon as possible (this shows cooperation and thus can reduce penalties).

Prompted, unprompted and voluntary HMRC disclosure opportunities explained

Realised you have made a mistake on your tax  return or forgotten to tell HMRC about some income, profits or gain? Telling HMRC before an enquiry is opened usually means the situation is resolved with lower penalties and at less cost to you.

From HMRCs perspective disclosures are attractive, they shift the workload towards the taxpayer (or their agent), leaving them to simply check the details provided. From the taxpayer’s perspective, disclosures are preferable to waiting until HMRC opens and enquiry or investigation. It gives the taxpayer the opportunity to mitigate the penalties that would be imposed.

Frequently Asked Questions

What is a tax investigation and why am I being investigated?

A tax investigation constitutes an official examination of your tax payment history, and in the UK, HM Revenue and Customs (HMRC) conducts these investigations. The extent and seriousness of a tax investigation vary depending on the specific case. There can be several reasons behind tax investigations and inquiries, including:

Triggered by the submission of a tax return.

Stemming from errors or misunderstandings.

Arising from conflicting information from another source or a whistleblower.

Conducted as part of a random inspection.

Initiated due to potentially incorrect information.

The crucial aspect is to determine the nature of the tax inquiry and how best to address it. In many instances, HMRC may initially provide limited details about the investigation.

If you are aware of discrepancies in your tax affairs and are uncertain about how to resolve them, or if you have concerns about being investigated or facing potential prosecution, seeking expert guidance on navigating these issues is of utmost importance. It is highly advisable to consult with a specialized tax attorney promptly. Please feel free to reach out to us for a confidential initial consultation with our experienced solicitors if you wish to discuss your specific situation.

How long does a tax investigation take?

How long a tax investigation lasts hinges on several factors. These include the number of inquiries HMRC needs to resolve, the intricacy of the factual and legal issues at hand, the pace at which both the taxpayer and HMRC investigator handle correspondence, and whether there is a need to seek guidance from legal advisors on either side.

It’s not uncommon for tax investigations to extend beyond a 12-month duration, and in certain cases, they can persist for five years or even longer, especially when tax avoidance schemes are in question. What is becoming apparent is that tax investigations are taking more time, as HMRC adopts a more assertive approach and tends to assume a more stringent stance, particularly when assessing potential penalties for past tax underpayments.

How far back can the HMRC investigate?

The timeframe of HMRC investigations in a tax inquiry is highly contingent on the specific details of each case. In certain situations, HMRC may seek information and documentation dating back as far as two decades (20 years). However, in other scenarios, this timeframe might be shorter.

Aside from being resource-intensive and costly, the extent of HMRC’s historical investigation can pose practical challenges for many individuals. Consequently, it becomes crucial to understand how to collaborate with HMRC to prevent undesirable estimated tax assessments.

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