One of the East of England’s leading firms of accountants, Moore Thompson, is encouraging businesses not to stress should they receive notice of a tax investigation in the coming months, as millions begin submitting their tax returns in January.
As the online self-assessment deadline draws to a close at the end on 31 January 2019 it is likely that thousands of taxpayers will receive enquiries from HM Revenue & Customs (HMRC), whether they have acted inappropriately or not.
Heather Bright, Tax Partner at Moore Thompson, says that many will expect the worse not realising that a large number of investigations are selected at random without HMRC providing a reason for their enquiries.
She said: “whether you are subject to an ‘aspect enquiry’ or a ‘full enquiry’, receiving a letter in the post informing you that HMRC has placed you or your business under investigation can be very daunting.
“Companies or individuals facing a HMRC enquiry do need to act quickly, but shouldn’t panic, as they will usually have between 30 and 35 days to respond to HMRC’s initial letter with the appropriate information.
However, she warned that ignoring the timeframes given could result in a penalty and so advised that taxpayers should seek professional advice sooner rather than later.
“When under investigation, if you do not respond to HMRC’s correspondence within the timescales provided, you will receive a Schedule 36 FA 2008 information notice,” she said.
“These documents will effectively order you to produce documents and information and, if you do not comply with HMRC’s demands stipulated within them, you will be hit with a penalty.”
Heather said that taxpayers should be aware that an intensive ‘full enquiry’ could last 18 months or longer and be extremely costly.
“Fortunately, it is usually possible to resolve the matter quickly and efficiently if an accountant is able to intervene at the earliest possible opportunity,” she said.
“To minimise costs and stress, businesses should seek out fee protection insurance via their accountant, which will cover the costs of defending themselves and will help to ensure that they get the best representation.”