Tax enquiries or investigations can result in additional tax, penalties and costs.
Under the self assessment system, an HMRC officer has the right to make enquiries into any tax return and to any subsequent amendment to the return made by the taxpayer.
There may be a specific transaction or entry on the return which causes the enquiry to be opened, but also HMRC randomly select a number of tax returns for enquiry each year. In each case HMRC will generally need to be furnished with the information and source documentation to allow them to confirm that the return is correct.
The taxpayer will have to pay any additional tax arising as a result of the enquiry and, depending on the nature of the error, HMRC may charge additional penalties of up to 100% of the underpaid tax.
If you would like more information regarding tax enquiries and investigations, or if you need help with an open enquiry, please contact Tax Innovations on 01962 856 990 or firstname.lastname@example.org.
For an initial consultation please call us on 01962 856 990 or visit our contact page.