HMRC tax investigation – should I engage a tax specialist?

If you’re the unfortunate recipient of a tax investigation letter from HMRC then don’t panic, you just need to know what to do next. Read our tips on working with a tax specialist to handle your HMRC investigation.

Seek professional help from a tax specialist

Tax is a complicated business and should be handled by a professional. An experienced tax specialist will have seen it all before – they’ll know exactly how the taxman operates and what your next move in dealing with HMRC should be. If your chosen tax specialist doesn’t give you confidence that they can help then you should approach another one. Selecting the right tax specialist could save you a fortune in the long run.

Get your paperwork together

Make sure that your records are as thorough as possible. And if your mistake has been not to keep records then you should gather as much paperwork as you can to back up your position. Bank statements, receipts, previous tax returns and anything else related to the finances of your business should be given to your tax specialist so that they can build a strong case for presentation to HMRC.

If you’re not sure ask the taxman

If you’re unsure what HMRC is asking you for, then ask them for clarification. HMRC has a duty to work with you to resolve the dispute satisfactorily, and the only way that they can do this is if you’re able to give them all the information they need. Your tax specialist should be able to help you formulate the questions that you need to ask HMRC.

Honesty is the best policy

If HMRC is investigating you then they probably have a good reason for doing so. They may have limited resources, but they also have access to vast amounts of data, which has probably flagged you up as being of specific interest to them. So, be prepared for them delving into your past to establish whether similar mistakes have been made in previous years – they have the information at their fingertips to do this.

Tell your tax specialist immediately if you know that there’s been an issue with any of your tax returns in the past – it’s best to be honest about it straight away. Then, tell HMRC all of the facts and give them reasons why you believe that things have gone wrong. Co-operating upfront will save you a lot of time, stress and potentially money.

Managing the taxman’s expectations

You should always attempt to meet HMRC deadlines for providing information and making agreed payments. If you can’t, then you should tell them in plenty of time. This will save you a lot of worry and increased likelihood of penalties and formal demands for full payment.

Preparation is key when dealing with HMRC

If you’re asked to attend a meeting to discuss your tax investigation then make sure that you know exactly what will be covered and what documentation HMRC is expecting you to provide. If you don’t understand what’s being requested of you then ask for clarification, this way you can avoid misunderstanding and time wasting on the day.

It’s very important to engage your tax specialist (if you’re using one) at all points along the way, they’ll be able to guide you in what you should tell HMRC and when. They can also attend meetings with you and you can authorise them to liaise with HMRC on your behalf, this will help keep the dialogue flowing and get you to a satisfactory resolution quickly.

To discuss this post or to find out how KPP can help you with a tax investigation contact Stephen Usher on 0141 418 6550 or email 

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