Tax & VAT Disputes

For investigations into direct taxes such as income tax and corporation tax, tax returns may be selected at random, including those in which everything appears to be in order. However, the bulk of enquiries are selected according to risk, on the basis that there is significant tax at risk, or a suspicion that something is wrong.

You may be fortunate to be subject to a fairly routine enquiry, which can be resolved by the production of supporting records. However, it could also be the prelude to more serious investigations. Under the COP 8 or COP 9 procedures if HMRC suspect there is evidence of tax avoidance or tax fraud where HMRC are considering prosecution. The first someone will know about this is either a letter to attend a meeting under caution or at worst a dawn raid.

VAT investigations are typically triggered either if a routine VAT inspection uncovers irregularities, or as a result of out-of-pattern declarations and repayment claims, or if you operate in a sector deemed “high-risk” by HMRC. Depending on the severity of the suspected offences, HMRC can choose to exercise their powers under the Civil Investigation of Fraud procedures or, in the most serious cases, to launch a criminal investigation with subsuquent prosecution potentially resulting in imprisonment. Intervention by HMRC can be initiated by pre-notification of an enquiry at one end of the scale, to an unannounced on-site inspection at the other. You may be required to produce relevant documents for inspection and potentially for removal by HMRC and to attend interviews.

On conclusion of their investigation, HMRC will issue you with an assessment of the VAT understated or over-claimed, together with a proportionate penalty. We recognise the need to deal with problems quickly and effectively rather than allow the investigation to be led by HMRC’s inspectors. The most important thing to consider when going through any investigation by HMRC is to get experienced professional representation so you are properly advised at every stage of the process. We understand that an enquiry by HMRC can be disruptive and unsettling. We take the strain out of the investigation so you can continue to enjoy peace of mind.

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