Facing HMRC Investigation

Facing HMRC investigation can be a very unpleasant experience to say the least.  How to deal with this and who would be the best to assist in having this resolved?

In the first instance, the HMRC has Advisors who are deployed to assist with enquiries and guide you through this experience. However, before we go further in explaining their role, allow us to provide your with key points on HMRC Investigation.

1. You must take an immediate action on notification of the HMRC down raid.

2. HMRC must comply with the requirements of the Police and Criminal Evidence Act 1984.

3. Cases may be tried before the Magistrates or the County Court.

4. A defence may be based on the amount of the tax concerned or on the defendant`s intentions.

5. The HMRC are likely to demand a confiscation order if they get successful conviction of the defendant.


Allow us now to discuss each point in brief.

If you are in receipt of a letter with tax demaND, or have experienced an unexpected visit from the HMRC agents, the first thing you do is to get their ID`s, contact your Accountant, who will verify their identity. Aletrnatively, you can call the HMRC Advisors. The latter in our opinion will be not as helpful as your trusted accountant, particularly, if he/she is a tax specialist.

It is a well know fact that clients sometimes in panic, withhold the truth from the agents which may turn badly against them. Therefore in such cases, truth and nothing but the truth is the best point of action.

At times, the HMRC enter the premises by force, but that is only in very drastic cases, and before they do this, they need to have a Court Order allowing them such an entry.

The Police and Criminal evidence Act 1984, clearly stipulate the rights and duties of the unifiormed agents on their behavoiur and authority to act, therefore this is a type of protection for you against unauthorised actions, for which you can then take action against if necessary.

Criminal tax investigation can be very stressful to the clients, however having the right team behind, this can be a matter of much lower stress level when defending that case.

It is a sad fact that clients sometimes withhold the truth from their tax advisers/Accountants . It is an even sadder fact that HMRC can be extremely aggressive and are prone to pushing the boundaries between tax avoidance, which is lawful, and dishonest tax evasion, which is criminal.
Subject to the individual case, the defence of the case may be concerning an amount of tax owned, or in some cases, client known as the defendant, may be willing to set out his/her intentions and be tried on that basis. This however largely depends on the type of offence committed, remember that there is a difference between a criminal and avoidance offence.
It is therefore vital for the client to be able to cooperate with either the HMRC Advisro, or a reputable Tax Specialist such as an Accountant to help in defending such cases. Once your case get to the Court and subsequently uou loose it, the HMRC har a right  and usually go for confiscation order, and that could mean you loosing your life`s work.
Therefore it is always best to safeguard your self and your business, by taking up advice from a specialist Tax Advisor, that could well be your own Accountant, or make a point to see one if your Accountant cannot help you.

Leave a Reply

Your email address will not be published. Required fields are marked *