MacDougall & Co
Chartered Tax Advisers



HMRC Enquiries | Bad News for Tax Cheats | Penalties | Enquiries: How we can help | HMRC have teeth

HMRC Enquiries

The Revenue have frightening new powers (from April 2009)

They can visit your workplace with just 7 days notice. This includes that part of a home used for business, but not the rest of your home
They have on-demand real-time access to your premises, records and assets
There is no procedure to appeal against this access
They can check current records as well as earlier years. That means that they can check records you are keeping NOW relating to now
They can check anyone's tax position

This Could Be You

Opening your post one morning. A brown, very slightly bulky, envelope, a typed address, white paper (not the gray favoured by the Revenue's self-assessment automated responses), and inside a letter written to you by a Revenue officer.

The Revenue officer has a few questions.

Although politely written, it dawns on you that you are accused by HMRC, a government department with unlimited resources, of committing an offence. You are given 30 days to provide certain information - and, often, your records.

As time passes, you realise that you have a choice.

You may choose to defend yourself - average cost in the region of £2000, plus time and stress over the next 18 months.

You may choose to plead guilty and close the case now - average cost around £3500.

Which do you choose?

Every day people like you are forced to make this decision by the HMRC.

85,000 people like you, last year. That's 326 people a day...

... 326 people every day ...

This is how it happens ...


The Revenue can open an enquiry into your tax affairs without giving a reason. A proportion of people selected by the Revenue for an enquiry are selected at random. This means that whatever you do it is impossible to ensure that you are not selected for enquiry.

Possibly the least attractive side of Revenue enquiries is that many people make the commercial decision to pay the Revenue the 'tax' that they are seeking to 'recover' rather than to pay the costs of establishing the true position.

This is like pleading guilty to save time and money.

A survey by Abbey Tax Protection Ltd, published in the Tax Adviser, has shown the following statistics. Last year 85,000 businesses (self employed people and partnerships) were subjected to a 'full' enquiry by the Revenue (as opposed to an 'aspect' enquiry which covers a specific part of the person's tax affairs).

Each enquiry lasted an average of 18 months

Each enquiry resulted in an average payment of £3,500 per case

The average cost of defending the Revenue's actions was £2,000

And the bulk of the £294 million collected through full enquiries was largely as a result of commercial decisions to pay the Revenue what they were seeking rather than to pay the cost of the defence.

This means that a number of ordinary people elect to settle with the Revenue rather than to suffer the stress and cost of a protracted battle to establish their innocence. An undetermined percentage of these people are presumably innocent. They pleaded guilty to save time and money. These are people like you and me.

Fee Protection: We offer professional fee protection. This is designed to protect you from some of the costs of a Revenue enquiry. Click here for more detail, including prices.

How we can help you. Click here.

Developments after this page was prepared:

Businesses stressed by tax investigations
Twenty per cent of businesses subjected to a tax investigation collapse through stress and diverted management time.
Source: 21 August 2002

This what V.M. said about us, when we dealt with an Enquiry into her affairs by the Revenue
"It was fantastic. I was really pleased."
To see what other people have said about us click here.


TIME LINE: Page prepared on 30 October 2000, Amended on 15 April 2006 and on 18 February 2008, Data added on 26 February 2008, Changed on 22 June 2009, and on 2 April 2010

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