Tax Enquiries

We are fortunate not to have to deal with many enquiries from our existing client database. We would like to think that largely this is because our client tax returns are accurate. Most of our enquiry work, therefore, is done via recommendation and normally after the new client had dug themselves into a hole.

One particular case that we took on was a client who had amassed several assets and savings of hundreds of thousands of pounds with only a modest income. The case had been handled by a small firm where it had been accepted that errors had been made and records had not been kept. HMRC had moved the case to their Special Compliance Office (now the Fraud Investigation Service) and raised an assessment for £531,000. When introduced to us our client was ready to accept this figure and seemed unaware there were alternatives.

Our client accepted they had “overlooked” some income and were keen to come clean. However, at this point, HMRC was looking at the last 20 years as they are allowed to in such cases. It was, therefore, very difficult to challenge the assumptions made as the records kept were poor.

Firstly, we had to persuade our client to be patient and not to panic. Easier said than done, with a tax bill of over £500,000 and having been read your rights. The enquiry took nearly 4 years due to the time required to recreate accounts over 20 years and to source information from overseas. Our costs over this time exceeded £20,000 but this was time well spent.

After some negotiating we were able to agree on a settlement of £134,000 with HMRC which was a much fairer reflection of the tax due with suitable penalties attached.