What are the risks?
With an average enquiry taking 18 months to conclude, the associated costs can quickly escalate, yet the cost of not defending enquiries to their full extent could be substantially higher.
If you cannot afford the defence, you could end up paying a much higher tax bill by having to accept HMRC’s demands. HMRC continue to expand their information sources to better target their investigations. They have access to data from card payment providers, banks and building societies, land registry, letting agents, mortgage applications, DVLA, foreign data from overseas tax authorities and the tax evasion hotline to name a few.
Six years ago, HMRC were granted £800m to invest in compliance activity, which continues today in the form of targeted campaigns and probing cross-tax enquiries designed to maximise the tax they can recover. Being subject to a tax investigation is extremely stressful and can impact every aspect of your life. We cannot prevent HMRC from targeting you, but we can provide peace of mind by removing the added worry of defence fees.
Even if you have done nothing wrong, you may still be selected for a detailed review of your tax affairs.
HMRC continue to narrow the tax gap
The UK tax gap in tax year 2019/20 increased to 5.3% (£35 billion), meaning that HMRC secured 94.7% of all tax due from businesses and individuals.*
In the 2020/21 financial year HMRC protected additional revenues of £30.4 billion through compliance activity; £2.6 billion related to individuals and £8.4 billion from small and mid-sized businesses.
With HMRC's continued drive for compliance, make sure you are protected with our comprehensive tax investigations package.
*www.gov.uk as at 4 November 2021