Tax Investigation... protect yourself now

7 September 2020

Tax investigations are time consuming and costly. Nobody looks forward to having a magnifying glass on their personal or business affairs. It’s a stressful time for anyone when the focus is on them directly.

the tax gap

There’s currently an estimated £35 billion tax gap between what HMRC should be collecting and what they actually are. More than half of this is accounted for by small businesses and individuals. So, in order to support in closing this gap, HMRC undertake Tax and VAT investigations.


  • To reduce the deficit
  • To make sense of the gap, and…
  • To penalise those who have contributed


HMRC identify and target areas where they believe tax is at risk. They use sophisticated software to cross match a wide range of data sources, and any anomalies can lead to an investigation. They then follow them up with an enquiry, but ultimately any HMRC return can be selected for an investigation.

What types of enquiries are there?

HMRC now have the ability to use much more information;

  • Enquiries related to the Coronavirus Job Retention Scheme.
  • Enquiries that stem from the use of sophisticated software.
  • Enquiries that result from HMRC actively encouraging members of the public to report taxpayers via their hotline.
  • Random enquiries that HMRC carry out, as ultimately any return can be selected for an investigation.

What does the protection include?

Any compliance check, visit (regardless of whether a dispute has yet arisen) or investigation started by HMRC regarding compliance with:

  • Corporation Tax Self-Assessment.
  • Income Tax Self-Assessment.
  • PAYE.
  • P11D.
  • National Insurance.
  • Construction Industry Scheme.
  • IR35.
  • VAT.
  • National Minimum Wage.
  • Gift Aid legislation and regulations.

This also includes:

  • VAT visits.
  • Employer compliance visits.
  • Check of employer records.
  • Interventions.
  • Capital Gains Tax.
  • Any HMRC use of pre-dispute information and inspection powers under schedule 36.


A small retail business received a VAT visit followed by some written questions from HMRC. They had the support of their accountant throughout, right from the notice of the VAT visit. This resulted in a timely conclusion of HMRC’s enquiry and virtually no additional tax to pay. The professional fees amounted to £3,200. Fortunately, the business had subscribed to the Tax Investigation Service and these fees were met in full by the service.

So, if you’re interested in protecting yourself against those unwanted costs and potential time loss, simply fill out your information now, and in collaboration with Croner TaxWise, we’ll ensure you’re covered.

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