Our annual Clifford Towers Tax Investigations Service begins on 01/11/2013. We recommend to all of our clients that they join the scheme.
The scheme covers costs in the event that you are selected by HMRC for an investigation and will ensure that you do not have to simply concede to their outward demands without adequately defending yourself .
HMRC are using every avenue available to them to identify tax discrepancies. This includes their Connect analytics system which trawls through over one billion data records including commercial data and even Social Media sites to select target areas for enquiry. 6 out of 10 enquiries now make use of the system and nearly £140m has been raised through follow-up activity.
The representation costs for a typical tax investigation can often escalate, not because the tax payer has made a mistake, but because they are required to prove themselves innocent of any wrongdoing. With HMRC investigation activity now commonplace and ever more innovative we are asking our clients to take a few moments to consider how the costs of a tax enquiry would impact on them and if applicable, their businesses.
An enquiry can arise from a simple omission from a tax return. Several clients each year are making use of the service. A £40 fee for an individual (self assessment) or £140 in the case of a business, will pay our costs which can be hundreds, if not thousands of pounds.
In the year to 31 October 2013, the Clifford Towers scheme has covered an enquiry by HMRC into one of our client’s usage of the Flat Rate VAT scheme. The total costs will be in the region £1,000 plus VAT, but our client will only have paid the £140 Other claims which we have seen this year have been for enquiries into clients’ returns where they have forgotten to tell us of new sources of income. HMRC has been notified of these new sources (e.g. a new pension) through connected data and their software flagged up the omission.
Unfortunately, we can’t stop our clients from being selected for an enquiry, but we can ensure that they can afford a full defence if it happens.
If you have any questions about an enquiry you have received, or would like to find out more about our Tax Investigations Service, please feel free to call me on 01788 577 613 or email me on firstname.lastname@example.org.
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