HMRC Civil Tax Investigations

A tax investigation is a check that HMRC performs under which it reviews your tax payment and reporting history of any UK-based citizen, employee, or company. HMRC, being responsible for the collection of taxes, possesses the right to perform checks on any individual or business to ensure that they pay the right amount of tax. HMRC investigation is not limited to Income Tax. The jurisdiction of HMRC includes all taxes, including:

• Capital Gains Tax
• Construction Industry Scheme (CIS)
• Corporation Tax
• IR35
• VAT

The type and severity of the investigation to be conducted by the HMRC depends on any individual case. A person or business may go through a serious investigation by HMRC’s Fraud Investigation Service (FIS) under Code of Practice 8 (COP8) or Code of Practice 9 (COP9).

1- Code of Practice 8 tax investigation

HMRC opens COP8 tax investigations if it suspects that the taxpayer deliberately skipped paying a huge amount of tax using complex tax arrangements or structures, involving offshore aspects. The aim of the HMRC’s FIS is to challenge your tax affairs. And ultimately recover tax, interest and penalties.

2- Code of Practice 9 tax investigation

HMRC’s FIS undertakes a COP9 investigation in the most serious civil tax cases, especially those that involve fraud. For example, HMRC may open the case if it suspects that the tax statement is an understatement that indicates the taxpayer’s dishonesty and purpose to commit fraud.  HMRC offers its Contractual Disclosure Facility (CDF) and provides 60 days to the taxpayers to accept or reject it. By accepting the offer, taxpayers get the chance to disclose any loss of tax to HMRC that has been brought about by deliberate conduct.  Taxpayers are given 60 days to accept or reject HMRC’s Contractual Disclosure Facility (CDF) offer. The CDF offers taxpayers the chance to disclose any loss of tax to HMRC that has been brought about by deliberate conduct.

The duration of the enquiry depends totally on the type of the HMRC investigation. The HMRC’s opening letter is an ideal way to determine the possible duration of any investigation.

In some cases, investigations can conclude after a short exchange of correspondence, while in other cases it might take many months during which period HMRC often consistently requests additional information. If the case involves complex tax structures or large businesses, it might take longer than a year. Typically, the length of a complex investigation lasts four years. In this period, HMRC can claim the remaining tax or penalties from the taxpayers.

In cases where the taxpayer has been caught submitting tax returns with mistakes, the process of HMRC investigation can stretch to six years. The period under investigations may go back as far as 20 years in case of tax evasion or criminal activity.

HMRC civil tax investigation solicitors at Kangs are highly experienced in handling voluntary tax disclosures. They can provide proven HMRC tax investigation advice, comprising of the best strategy and manage the entire investigation on your behalf.

Our HMRC tax investigation lawyers can advise you on all Civil tax investigations areas of HMRC, including:

1- Civil Evasion and Fraud Tax Investigations

• Code of Practice 8 (Specialist enquiry for fraud and bespoke avoidance)
• Code of Practice 9 (when fraud suspected by HM Revenue and Customs)
• Personal Tax Return Section 9A TMA 1970 Enquiry
• Code of Practice 11 (Self-Assessment Tax Investigations)

2- Partnership Tax Return Enquiry

• Section 12A TMA 1970 Notice Investigations

3- Corporate Tax Evasion

• Code of Practice 14 Investigation (Company Tax Return Investigation)

4- Self Assessment Tax Investigations

• Code of Practice 11 Enquiry (Local Compliance Offices)

5- VAT and PAYE Investigations

• VAT Evasion Investigation
• PAYE Audit Tax Investigation

6- VAT and Self Assessment Late Payment Penalty Scheme

• Advice and assistance on Late Payment Penalty Scheme for VAT & Self Assessment Tax

We advise and represent clients in relation to:

• HMRC tax compliance checks
• HMRC tax enquiries
• HMRC tax investigations
• Proceedings before the First-tier Tribunal and Upper Tribunal (Tax Chamber)
• Criminal proceedings when HMRC allege fraud has taken place

Our expertise in relation to HMRC tax investigations is extensive and includes:

• VAT & Kittel investigations, penalties and assessments
• MTIC investigations
• Personal tax investigations and assessments 
• Code of Practice 8 (COP8) 
• Code of Practice 9 (COP9)
• PAYE & National Insurance Contributions
• Corporation Tax Investigations and assessments
• Excise Duty
• Customs Duty
• Disguised Remuneration Schemes
• Tax Avoidance Schemes

Our experienced team takes a proactive approach to cases by actively engaging with HMRC to achieve positive results without the need to resort to costly litigation and thereby reducing any penalties payable. In addition to our own team of award-winning solicitors, we have long-established working relationships with other professionals who we are often required to work in conjunction with on HMRC tax cases including forensic accountants as well as the leading barristers and KCs in the country.

We can guide you in relation to:

• Understanding the litigation and settlement strategy of HMRC and advising you accordingly
• Making the appropriate disclosures to HMRC and responding to its on-going queries
• Negotiating with HMRC on your behalf to secure favourable repayment terms and reduced penalties
• The use of ADR by our qualified mediators as a means of settling tax disputes with HMRC
• Ensuring that the complex disclosure regime is complied with to the satisfaction of HMRC
• Preserving any immunity from criminal prosecution offered by HMRC
• Appropriate and robust representation before the First-tier Tax Tribunal and Upper Tribunal
• Advice on complex cross-border tax issues and work closely with professional advisers based in foreign jurisdictions

We are knowledgeable and experienced in many of the common and recurring features of a HMRC tax investigations including:

• Existence of undeclared offshore funds and assets
• Under declaration of personal income
• Under declaration of business sales
• Suppression of business turnover
• Non-disclosure of worldwide income
• Allegations of fraud central to the tax dispute

We guide clients through the complex process of making disclosure of unpaid tax to HMRC. The process can be time consuming and numerous disclosure reports may be required.

If HMRC considers that full disclosure has not been made or that a serious financial offence has been committed, it has the right to withdraw from the civil regime and pursue both corporate and individual clients on a criminal basis.

Our specialist team of white-collar crime defence solicitors are available to assist in any such investigation and prosecution. We are ranked as one of the leading criminal fraud defence firms in the country.

The expert lawyers at Kangs are available to assist you. We can arrange initial consultations in person, by video call or telephone.

Please contact one of our experts listed below or contact us at:

E: info@kangssolicitors.co.uk

T: 0333 370 4333