Tax investigations can be intimidating. At best they are a nuisance for an accounting practice, and can undermine your reputation. At worst, they can be a threat to your liberty. The modern regime at HMRC can seem abrasive and hard to manage. Mercifully, serious cases are few and far between in practice, but the incidence is increasing as HMRC quite rightly increase their focus on targeting and tackling tax evasion in all its forms (the yield from tax investigations is now well into the £billions and is increasing every year).

Nobody who is unprepared should deal with the Special Compliance Offices or the Revenue and Customs Prosecution Office without specialist help. If the worst happens, don’t panic. We have good relations with specialist law firms; we can help and you will know that there is someone discrete who can stand up for you, and /or your client.

We understand that tax investigations are stressful in all their forms. By working with HMRC, and understanding the reasons for their enquiries, it is possible to exercise a level of control and reduce both the timescale and, consequently, the level of anxiety (something we never underestimate). Whilst we only act on the basis that full and frank disclosure will be made, we will robustly defend our clients’ legitimate technical positions.

At the other end of the scale, there are times when District level enquiries cause particular problems. We specialise in unblocking these situations – sometimes a fresh pair of eyes can see a way forward that is not obvious when you are closely involved. In between the District and the RCPO and SCI are a host of other specialist departments that may raise investigative enquiries, including anti-avoidance units such as (in “old language”) s.703 or s.739 groups, FICO, and of course the Offshore Fraud Project Teams. Not to mention the part of HMRC that used to be known as Customs, and their VAT enquiries.

Since HMRC published their Litigation and Settlement strategy policy in June 2007, it is clear that many disputes may have to be settled on an “all or nothing” basis. In such cases, if a dispute with HMRC cannot be resolved by negotiation it may be necessary to prepare for litigation. The chances of successful resolution will be increased dramatically if advice is taken at an early stage, and here we can also assist. There is no advantage in spending sizeable sums in pursuit of litigation that does not have a realistic chance of success [that is equally true for HMRC]. If appropriate we can assist in taking the initiative for the closure of enquiries, via the Commissioners if necessary.

What causes serious tax investigations?

• Materially false statements or materially false documents – particularly during a CIF
• Avoidance schemes that rely on false/altered documents or misrepresented facts to enhance credibility
• Involvement of “trusted” professional advisors
• Suspected links to wider criminality/ organised crime
• Serious threat to tax base
• Combinations of the above are particularly vulnerable

What is our approach to tax investigations?

• Control the process
• Minimise the scope and the settlement figure
• Shorten the time frame
• Argue fully any technical points/ mitigation factors
• Reduce the client’s stress
• Regularise things for the future (“wipe the slate clean”)

see Case Studies

see Indirect Tax

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