If you (or your business) have recently received a letter from the Inland Revenue notifying the opening of an investigation, you need to take control of the enquiry from day 1 with the help of a trained specialist
A successfully managed investigation will have a quite different outcome to one that is poorly managed. It is not uncommon for an Inspector to request a huge list of information in the opening letter to the taxpayer's agent. Only material which is 'reasonably relevant' to the return should be provided. Meetings at an early stage should be resisted until an Inspector has examined the records of a business and only agreed to if he still has justifiable concerns.
Similarly, directors' personal bank statements should not be provided during the course of a company enquiry unless the Inspector first opens formal enquiries into the director's personal Self Assessment returns. These are just minor examples of many decisions which may prove traumatic and financially costly to a client if the wrong decisions are taken. Clients need to be properly prepared before attending meetings with the Inland Revenue, and due care and attention needs to be given to the timing and location of such meetings if they are considered appropriate. Similarly, visits to business premises, which are increasingly being requested by Inspectors, need to be properly handled with appropriate reassurances being given by the Inspector prior to giving agreement.
It is equally important to seize and maintain the initiative and momentum of an investigation. The practitioner who loses the momentum in the early stages of an investigation will often never regain it. Similarly, Inspectors whose excessive demands are acceded to at an early stage may well go on to make even more unrealistic and unjustified demands.
Our tax investigations team will always strive to limit the scope of any tax investigation in order to keep professional costs to a minimum. We will put forward technical arguments on your behalf and seek to limit the amount of tax potentially being demanded by the Inland Revenue. We will use our negotiating skills to restrict the levels of any interest and penalties which may be due.
Great care also needs to be taken in completing the documents that the Inland Revenue will ask you to sign at the end of the investigation in order that they may not be unjustly used against you at some future date.