An increasing trend
The level of HMRC investigations are on the increase. The resulting negotiations are time consuming and complex. They require an expert understanding of tax legislation and HMRC processes. Our experience can save you time and money if you are approached for an enquiry. At the political level, there is a drive towards maximising tax revenue without raising tax rates and investigations are seen as one of the most effective ways of achieving this aim. We anticipate the level of tax investigations to increase significantly over the coming years.

Who is affected?
Whilst any individual who completes a tax return could find themselves under investigation, the vast majority of investigations carried out affect businesses.
The ‘tax man’ is aggressively investigating businesses in high risk category business sectors as well as randomly selecting business from all sectors

Implications of an investigation
An investigation into your tax affairs can be damaging, and not just financially. The destabilising effect of an investigation should not be underestimated. Not only can there be significant personal stresses on you and your family, but vital relationships with third parties (including customers, suppliers and bankers) may also be at risk.

How can Henton & Co help?
We can provide the following comprehensive service:
• Ensuring that HMRC adhere to their codes of conduct and that only information relevant to the enquiry period is provided
• Explaining what you should expect from the Inspector
• Ensuring that an application is submitted to close the enquiry where there is no prima facie evidence of any understatement
• Preparing you for any interview with the Inspector
• Ensuring that at interview you are not intimidated or asked ambiguous questions, the answer to which could be misinterpreted
• Negotiating those elements of the settlement where the Inspector has discretion once the facts have been established; in particular, by emphasising any features that mitigate any penalty sought
• Ensuring that the quantum of any settlement is minimised as far as possible
• Where criminal proceedings are a possibility, we can recommend and work with experienced legal representatives or assist your own solicitors on detailed accountancy matters
• Performing a ‘health check’ on your systems and procedures in order to detect errors before an investigation is started (e.g. PAYE / NIC). We can offer advice by putting matters right


Recent tax investigation work undertaken includes:
• Successfully reopening a tax investigation undertaken by another accountant and negotiating a settlement from £250,000 (including tax, interest and penalties) to £50,000.
• Reclaiming over £30,000 from the Contribution Agency for overpaid National Insurance Contributions for a film production company over a 5 year period.
• Successfully negotiating with HMRC the VAT treatment on development costs and sale of a mixed used development (the exercise involved challenging HMRC’s partial exemption calculations).

We offer all our clients a comprehensive insurance policy for protecting against professional fees when being investigated by the tax authorities.