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Tax Investigation

HM Revenue & Customs may decide to look at your tax affairs for a number of reasons. In all cases it is important the correct strategy is used to ensure that the enquiry or investigation is completed as quickly and cost effectively as possible.

Random enquiries

Under self-assessment tax returns are subject to the "process now check later" regime. This means that HMRC simply process your tax return based upon the figures provided unless there are any obvious mistakes which they will seek to correct immediately.

Focused enquiries into a specific source of income or gains

These types of enquiries focus on specific sources of income or gains and are usually based upon third party information.

An HMRC taskforce review of a particular "high risk" industry

HMRC are now focusing on particular "high risk" industries and are focusing resources on ensuring groups within these industries are reporting the correct amount of tax.

Participation in an identified tax avoidance scheme

HMRC are now focusing on what they term "tax avoidance schemes". These are transactions which HMRC believe have been entered into for the primary purpose of reducing tax.

Identification of offshore assets

There have been a number of well publicised initiatives in respect of the identification of undisclosed offshore income and assets.

Code of practice 9 investigations and criminal investigation

If HMRC are to undertake a code of practice 9 investigation they suspect serious fraud but are seeking to collect tax, interest and penalties through civil settlement.