Hentons logo

10 tips for when the taxman comes knocking

SMEs are set to feel new pressure from HMRC as it increases funding to its 'Fraud Investigation Service' to £204 million in the current financial year, warns accountancy firm Hentons.

Gary Clarkson, Director of Tax Strategies at Hentons, shares his top ten tips if the taxman raids your business.

1. Don’t panic if the HMRC raids your business. In this situation, both sides have to follow the rules, and a business owner can take steps to mitigate the impact.

2. Seek professional advice immediately. The process has to be fair, and tax inspectors can be held to account just as any public sector service.

3. Audit which staff need to be trained and deliver the required training. Raids are generally around 6 am, so it's cleaners and security staff.

4. The raid warrant is geographically based so they can only search things at the address shown on a warrant.

5. For evidence to be legally useful HMRC must talk through every item seized and get sign off.

6. Legally privileged documents can't be taken.

7. If you are on the premises, you are covered by the warrant, which means HMRC can, therefore, search you and your bags.

8. Cars parked in the business car park at the same address are covered and can be searched.

9. HMRC warrants cover electronic media. Part of the raid team will be IT specialists who will forensically interrogate computers, phones, etc. They will take the hardware away if necessary.

10. Always check the documentation. It is not unknown for HMRC to have an incorrect address, which renders them invalid. During the search, if HMRC finds reference to other addresses used by individual or organisation they will immediately seek a further warrant for that address and search same day.

If you want to have a conversation about your tax affairs, contact Gray on garyc@hentons.com.

back to top