These types of enquiries focus on specific sources of income or gains and are usually based upon third party information. Such third party information could come from other departments of the government, third parties such as banks or employers and from disgruntled parties such as ex-partners.
In such cases it is important to quickly determine whether there has in fact been a non-disclosure or incomplete disclosure. In many cases it is found that the information received by HMRC may be incorrect and dealing with the matter promptly and openly with HMRC can mean the matter is quickly resolved.
Where there has been non-disclosure or incomplete disclosure, like a random enquiry, it is important that these are quickly identified and put right. In these circumstances it is far better from a strategic point of view if you make disclosure to HMRC and again this will ensure that the enquiry is dealt with quickly and efficiently. In determining penalties HMRC will look at how you co-operated during the enquiry.
By dealing with matters quickly and making disclosure this will also hopefully limit the enquiry and ensure that HMRC do not seek to broaden this to a wider enquiry or investigation into your general tax affairs.
