What is a Tax Investigation? HMRC

Tax Investigations by HMRC can arise due to many different factors, but in essence, the two main drivers will be connected to either tax avoidance or tax evasion.

Tax avoidance is using loopholes in the tax system to mitigate tax liabilities, whereas tax evasion is deliberately concealing tax liabilities and is considered a criminal activity by HMRC.

There are of course explicable circumstances where under declaration of tax can take place, mainly due to a lack of understanding of the tax system, or simply, that an adviser has made errors in your tax records.

How long a Tax Investigation takes and how far back the investigation goes will depend on the severity of the case. Regardless of how long a Tax Investigation by HMRC does take, it is a stressful and worrying time for those under the spotlight.

Our specialist Tax Investigations Team regularly assists individuals who are facing an Investigation by HMRC. Our team will advise and assist you through the investigation and liaise with HMRC on your behalf.

HMRC will contact you by letter and usually request specific information and evidence in order to scrutinise your tax affairs. Once HMRC has its outcome, it may be likely that you receive a fine or financial penalty in addition to repaying your unpaid tax liability. 

If you receive a letter from HMRC, you should speak to a professional rather than trying to liaise with HMRC directly. Our experienced team regularly achieve reduced tax liabilities, penalties and fines for those facing investigation.