An HMRC enquiry will begin with the receipt of an enquiry notice and an informal request for information. HMRC can investigate Self-Assessment Tax Returns, Corporation Tax Returns and VAT Returns within certain time limits, this could include sole trade, partnership or company accounts, Research and Development claims or for an individual, issues such as property rental, capital gains or an incorrectly claimed relief or understated income. If you are an employer, you may be contacted concerning PAYE or Employer Compliance issues, such as expenses or employee benefits, if you employ a contractor HMRC may seek to challenge off-payroll working (IR35) arrangements.
HMRC may enquire into Stamp Duty Land Tax reliefs that you have claimed.
At the outset it’s vital to know whether the correct statute has been used for the type of enquiry, whether the enquiry is within the time limits and also whether HMRC are entitled to receive the information they have requested.
HMRC will review the information and documents supplied and depending on the type of investigation, it may be that a meeting is suggested to enable them to gather further information and evidence, this is usually more appropriate in cases involving sole trade, partnership or company accounts. Professional representation at this meeting can be invaluable not only in terms of providing support but to ensure that HMRC adhere to process. If HMRC suspect that there is something wrong with the accounts or tax return they may then seek further information enable them to establish what the correct tax position should be and a period of negotiation can begin to agree the final amount of any duties at stake. Interest and penalties may then be added; the penalty process is a further area where professional knowledge of HMRC’s complicated penalty regime can greatly assist in achieving the best outcome possible. The road to conclusion of the enquiry can be a lengthy process; careful handling of the enquiry can do much to reduce the time taken and keep things focussed to ensure the enquiry concludes as quickly as possible.
If you have received an enquiry notice from HMRC and are not sure what to do or if you have an ongoing enquiry that seems to be dragging on, or have income you have not previously disclosed to HMRC please get in touch using the contact details at the bottom of the page to find out how we can help you.
DISGUISED REMUNERATION SETTLEMENTS
This is an area in which HMRC has been very active over the last few years.
Disguised Remuneration can take many forms and HMRC continue to investigate tax avoidance schemes which they believe do not work and seek to tax the payments received as remuneration. Such schemes can involve the use of a trust structure through which payments may be made in the form of loans, other schemes can involve things like spread betting or e-shares.
HMRC investigate potential tax avoidance schemes and will often need to protect their position for earlier years resulting in the issue of assessments/determinations for years passed. It can take many years for HMRC to go through the investigation process but it’s important to deal with assessments quickly to ensure that appeals are made on time so that the assessments don’t become final. HMRC may also issue advance notices for payment, these are called Accelerated Payment Notices or APNs, again it’s important to deal with these quickly as late payment can run the risk of incurring penalties.
For those who want to settle their use of Disguised Remuneration Schemes with HMRC, the process can be a time consuming and complicated process, HMRC calculations can be very detailed and need careful scrutiny as often discrepancies arise.
We have assisted many people with settling their affairs with HMRC and have had considerable success in resolving discrepancies and achieving time to pay where this is needed. If you have used a scheme which you believe may be a Disguised Remuneration scheme and would like to explore the possibility of settling with HMRC or if you have been contacted by HMRC but are not sure how to proceed please do get in touch to find out how we can help.
If you would like any further information or advice on HMRC Enquiries and Disguised Remuneration Settlements, please don’t hesitate to contact us.
Call us on 01908 219100, or drop us an email on
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