Depending upon the reason for the initiation of a tax investigation by the HMRC, the scope of the investigation may greatly vary. When smaller discrepancies or suspicions are triggered, the HMRC may undertake an Aspect Tax Investigation whereby one or several of the aspects of your personal or business’s areas of tax returns are investigated. This is usually over a shorter period of time with less documentation being required by the HMRC. However if contraventions of any tax regulations are unearthed, this may then be promoted to a Full Tax Investigation.
If you find that you are being subjected to a Full Tax Investigation, the HMRC will investigate all aspects directly and indirectly related to your tax returns. This is a much bigger and longer process, often lasting around 16 months and you will have to periodically produce any and all required information and documentation within a stipulated time frame to avoid any further repercussions.
Random Tax Investigation tends to be smaller in nature as the HMRC will usually only check on certain aspects of your tax returns similar to an Aspect Tax Investigation. It is highly advised to seek specialist advice if you learn that you or your business is being subjected to any level of tax investigation.
During an investigation, we as tax accountants will assist your business in meeting its various obligations as will be communicated by the tax authorities. We are able to investigate various aspects of the business and its finances and make appropriate recommendations so as to avoid any extra risks and minimise any potential liabilities.