What is a Tax Investigation and why am I being investigated?

A Tax Investigation is an official query related to your tax payment history and is conducted by HM Revenue and Customs (HMRC); the severity of the investigation completely depends on the case. Some of the reasons for tax investigations and inquiries, are the following:

Following a tax return;

As a result of a mistake or information which is incorrect

Conflicting information from another source;

Or a random check.

The most crucial thing is to identify the type of tax inquiry and how to deal with it in the best way.

Sometimes identifying the reasons behind the inquiry can assist but HMRC usually do not disclose enough details regarding it.

How to avoid Tax Investigation?

Apart from minor random inquiries, HMRC will set an investigation for a certain reason. Sometimes this will be due to information that the taxpayer is not aware of or misunderstanding of information that has been provided to them. In these circumstances, there is very little that can be done to avoid an investigation.

However, in most cases investigation is the result of affairs that the taxpayer is aware of, and some are expecting that one day HMRC will be asking questions and may investigate them. In these situations, a tax investigation can be avoided.

Are there things that you know HMRC would investigate if they knew or even if you paid sufficient tax?

Are there aspects of your tax affairs that you are unsure of or feel uncomfortable?

If the answer is yes to any of the questions, then it is best to seek a professional advice from a specialist tax investigation lawyer. If with support from an experienced tax lawyer, you have to go to HMRC and make disclosure before they commence an investigation.

So if there is an irregularity in your tax affairs that you are aware of and you don’t how to resolve it, or you are worried that you may be investigated, it is again vital to receive expert advise from an experienced lawyer specializing in tax investigations. You may contact and get an initial consultation with our expert if you want to discuss your situation. Get in touch with us today!