Examples of HMRC enquiries

Self employed builder subject to a full enquiry

HMRC requested all of the individual’s books and records and then raised questions regarding income from trade and other income that the individual had from a rental property.  HMRC identified approximately £6K of underpaid tax (over a number of years), although accepted £3K as a settlement, which was negotiated by the individual’s accountant.

Individual subject to an Aspect Enquiry

HMRC wrote to the individual claiming that investment income had been understated.  The individual’s accountant represented and challenged HMRC’s findings.  At the conclusion of the enquiry it was deemed that no additional tax was due and that the information HMRC was relying on was flawed.

Food wholesaler subject to a PAYE Compliance Review

Following a PAYE Compliance Review HMRC deemed that additional tax of £10,000 was due as a consequence of the tax treatment of certain benefits.  The client’s accountant spent considerable time analysing HMRC’s findings and disputing their position, eventually agreeing a much reduced settlement.

Group of companies subject to a cross tax enquiry

HMRC opened enquiries into four companies who were all members of the same group.  They undertook a site visit and reviewed all books and records held in connection with corporation tax, PAYE and VAT.  Following the visit they raised a number of issues.  The client’s accountant attended the meeting and dealt with the issues, robustly defending the groups position.  Over a period of months the issues narrowed and eventually only a small adjustment of tax was made for less than £10,000.  The accountant’s fees incurred were well in excess of this.