Network partner, RfM Accountants based in the North West warns family firms about the potential costs of a HMRC investigation in their latest article.
They say, “There are many reasons why you might be selected for a visit from HMRC, including simple bad luck. But while you can’t avoid the tax man – you can avoid the cost of defending yourself during an HMRC tax investigation.
*Tax is a little word with big implications. That’s why we work hard to give you the best possible advice to make tax, VAT and compliance altogether less taxing. But even if you have received sound guidance on tax, you could still be selected for an enquiry. Whether you have done anything wrong or not, a tax investigation could cost you or your business money.
Why do HMRC carry out tax investigations?
The gap between the amount of tax collected by HMRC and the amount of tax it should collect is estimated to be £33 billion. £17.5 billion of this shortfall has been attributed to small businesses (£14.1bn) and individuals (£3.4bn). Tax and VAT investigations are a key element of HMRC’s strategy for closing the tax gap.
What is an HMRC enquiry?
HMRC identify and target areas where they believe tax is at risk. They use sophisticated software to analyse a wide range of data sources; any anomalies can lead to an investigation.
They are also known to carry out random investigations as well as acting on reports from the public.
Enquiries can be unfair. Even if there is no additional tax to pay, the taxpayer or business will still have to deal with all the queries, stress and uncertainty of an HMRC visit. You could try dealing with HMRC yourself, but this can often make matters worse. The best defence against the pressures of an investigation is to engage professional representation from your accountant from the outset. But this, of course, will come at a cost.
In the event of an HMRC investigation, you will incur additional accountancy fees – even if you have done nothing wrong.
Tax Investigation Service – be prepared, be protected
Our Tax Investigation Service brings peace of mind that you will not pay any additional accountancy fees if you are targeted for an enquiry. The service is backed by an insurance policy that covers up to £100,000 of fees in relation to the case, with no excess.
If you are in business and have employees, you will also have access to HR, Employment Law and Health & Safety experts via an exclusive advice line.
Key benefits according to RfM Accountants:
- Expert representation from us in the event of a tax investigation
- Peace of mind that we’ll deal directly with HMRC on your behalf
- Protection from professional fees up to £100,000 with no excess
- Access to experienced solicitors who can advise on all areas of law.
To take advantage of RfM’s valuable service, please call Alison Winstanley on 01772 431233 or email AWinstanley@rfm-more.co.uk. The scheme renews on an annual basis and new applications must be completed by 1 October 2019.
* The Tax Investigation Service is backed by an insurance policy that provides cover for up to £100,000 of accountancy fees incurred over the course of an HMRC enquiry. You would still be liable for any additional tax that is found to be owed.