HM Revenue & Customs enquiries can be random and can come at any time. Enquiries are on the increase as HMRC look to generate more tax to fund the enormous spend through the Covid-19 pandemic and ensure that the measures put in place to support the economy throughout the period have been utilised correctly. 

Getting Selected for Tax Enquiry 

The UK tax regime means the taxpayer is responsible for assessing their own tax liability by submitting a tax return and HMRC may open an enquiry into any return to make sure the taxpayer has paid the right amount of tax by using a sophisticated database to analyse data from 30 different sources and target enquiries. If selected for enquiry a tax inspector will write to you, or possibly even visit your premises. At the end of the enquiry, they may look to raise an assessment for additional tax due. 
 
HMRC’s detailed and intrusive questions may take considerable time to answer and many hours of work may have to be done to respond to the questions asked. These enquiries will almost certainly take several weeks and can drag on for months and sometimes years. Professional fees of hundreds or thousands of pounds can arise as a result. 
If you are subject to enquiry, you will need support from an accountant whose expertise may help save time and money, in the long run. 

Be Prepared 

As a taxpayer, there are a number of steps you can take yourself, at as a matter of course, to minimize your stress and assist in the event of an enquiry. 
 
Create a folder to hold all the correspondence between you and HMRC, including copies of any documents sent or received. You should also keep notes of any telephone calls you have made, or received, giving dates and the name of the tax officer you spoke to. Be sure to send any information by special delivery so you have both proof of postage and receipt by HMRC. 
Usual accountancy fees do not include the cost of dealing with enquiries which can be costly and complex, even if no additional tax becomes due. 

What is Tax Fee Protection ? 

A Tax Fee Protection Service protects against costs incurred dealing with HMRC enquiries.  
 
The benefits mean: 
you will receive the best possible defence 
you will not be charged for most professional costs incurred in your defence  
you will not have to concede to HMRC’s demands because of financial pressures 

Case Study 

Case of mistaken identity, a husband & wife partnership selling and installing double glazing was investigated by HMRC. At a meeting, HMRC alleged the husband had been dishonest. By the end of a long and detailed enquiry, HMRC repaid £129 of tax to the partnership and apologised, confirming that the allegation of dishonesty was a case of mistaken identity.  
 
Accountancy fees were approximately £5,000 and were paid in full by the accountant’s Fee Protection Service. 

Get in touch 

To enquire about Tax Fee Protection or any of the professional accountancy services provided by Marshes Accounting (trading name of Marshes CPA LLP) please call 01865 703385 or email [email protected] 
Tagged as: HMRC, Protection, Tax
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