Tax Investigation Service.

What is a tax investigation?

“[A taxpayer] is entitled to arrange his affairs so as to reduce his liability to tax” – Lord Wilberforce (WT Ramsay v HMRC, House of Lords).

The tax investigation process allows HMRC to identify errors in tax returns, recoup any money owed and stop people getting away with submitting fraudulent claims.

Every year, there’s a ‘tax gap’ – the difference between the tax that should be collected and the amount that’s received. It’s HMRC’s job to make sure this gap is as small as possible. Last year HMRC calculated a £35.5 billion shortfall. More than half of missing tax is usually traced back to small businesses and individuals via tax investigations, with a significant proportion of the tax loss being from innocent error.

So, if you’re the recipient of a tax investigation notice, a tax inspector is going to be delving into your records to work out if you’ve underpaid your tax.

The two main types of formal HMRC tax investigation

The type of investigation provides the biggest indication of how complicated the process might be.

1. An aspect investigation

HMRC suspect there is a specific inaccuracy on your self-assessment tax return. The inspector will want to check the records associated with this part of your tax return.

2. A full investigation

In a full investigation, every element of your tax return can be examined in detail. In short, the inspector may ask for all records for the tax year in question.

How can PEM help?

Our tax investigation specialists will help you cut through any jargon and respond directly to HMRC for you.

In short, when you appoint our tax investigation services, you get the full might of our experience and technical knowledge to bring your tax investigation to a prompt resolution.