HMRC self-assessment tax enquiries

January is traditionally the month when HM Revenue & Customs (HMRC) issues a significant number of self-assessment tax investigations. The reason for this is that the deadline for HMRC to open a formal enquiry for the majority of tax returns for the year ending 5th April 2021 will close on 31st January 2023.

Over the past couple of years, HMRC has invested heavily in compliance staff and it is expected that as more staff become fully trained, they will embark on a number of tax investigations.

What is a self-assessment investigation?

A tax investigation is when HMRC makes a decision to investigate the entries on a self-assessment return (individual or partnership). This can be anything from a query relating to one entry on the return to a full review of a business and the personal finances of the owner.

How will I know if HMRC has opened an investigation?

If you are unfortunate enough to be targeted by HMRC, a letter is likely to arrive in the next few weeks. The letter will make it clear that this is an official enquiry (often referred to as a compliance check).

What should I do?

If you receive such a letter, it is important that you don’t panic and send a knee jerk response. You should seek professional advice as soon as possible as this can make a real difference. As well as HMRC trying to establish that the submitted return is incorrect, they will also be seeking to understand how the error occurred, as that will influence the level of penalty that can be applied. An experienced advisor will be able to talk to you about this before engaging with HMRC.

How can rradar help?

If you find yourselves subject to a HMRC investigation, then please get in touch with the team at rradar who will be happy to discuss how we can help. Our team has years of experience gained with HMRC, so we can work with you to achieve the best possible outcome.

Contact Steve.Tetley@rradar.com (01482 296923) for more information