HMRC enquiries & investigations - what to expect
07/09/2023. With HMRC enquiries on the rise, we look at what an enquiry is, why they arise, and what happens at the end of the process.
HMRC enquiries & investigations and its penalties
The tax penalty regime is generally based on the behaviour of the tax payer. There are various factors which will be considered:
The penalty regime applies to both direct tax (for example income tax and corporation tax returns) and indirect tax (for example VAT) returns. The type and quantum of penalty will take account of the above factors to establish whether errors and omissions were due to:
The extent of the failure increases the level of penalty. Mistakes despite taking reasonable care are unlikely to give rise to a penalty, whereas deliberate action with concealment attracts a penalty of up to 100% of the tax due, which can be higher in the case of certain offshore non-compliance and / or tax avoidance matters
Other penalties can also be levied, based on:
We have a wealth of trusted and experienced professionals who can help you navigate an HMRC enquiry with the minimum amount of anxiety. Our team know the stress that can be experienced by a tax-payer during an enquiry and can provide our clients with comfort that their tax affairs are in capable hands.
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