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Tax Investigations

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					      The Course Taken By HMRC Tax
              Investigations

Her Majesty's Revenue and Customs (HMRC) can
initiate a tax investigation or inquiry on any individual
and big/small business that they suspect of irregular
financial activities. They do open up several random
investigations every year as well. For instance, the
investigators may decide to Inquire into a particular
type of trade, where they believe the scope of income is
much more than the average declarations. However, a
majority of the inquiries are concerned with cases
where they strongly suspect tax evasion to have
actually taken place. Whatever the reason HMRC may
have for selecting you for a tax inquiry, they are not
obliged to disclose it to you.
The investigation process starts with the arrival of a
letter from HMRC, intimating you that an inquiry has
been initiated into your financial affairs. Usually, you
will be asked to clarify certain things and submit a few
business records. It is best for you to get in touch with
a tax investigation specialist, who can guide you about
the proper course of action to be followed from here.
Quite often, expert help may lead you to identify
oversights or errors on your part that could have given
rise to the inquiry. You may attempt disclosing the same
to the HMRC and working out a quick settlement with
least amount of penalties.
In most of the tax investigations, HMRC carries out a
complete review of your business matters. They may
even delve into private affairs, such as investigating
your expensive personal possessions. You will be
requested to meet their inspectors for in-depth
questioning. They might also ask you to provide
comprehensive explanations and records to prove your
statements. You can refuse to attend the interview as it
is not obligatory, except in specific types of tax
inquiries, though HMRC will not tell you this.
If the HMRC detects any discrepancy at your end after
the investigations are over, then they calculate the
additional tax due from you and advise you about it. If
you are not satisfied with the accuracy of the
calculations, then you can appeal against it. However,
you will have to justify your own calculations. You can
try to negotiate with the HMRC and arrive at a
settlement agreeable to both the parties. If no
settlement is reached upon, then the case comes up for
hearing before the Commissioners, who then give their
decision. Once the amount of tax liability and penalty is
fixed upon, you simply pay it off and put an end to the
stressful investigation.

Article source : Elfaleh Mohamed

				
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Description: Tax Investigations