Expert solicitors to help your business address HMRC pressures
Our highly experienced tax investigations solicitors can help you navigate challenges with HMRC with confidence and clarity.
Facing an HMRC investigation can be a daunting experience. We advise businesses, individuals and professionals in respect of investigations and prosecutions that may involve corporation tax, income tax, national insurance and VAT.
HMRC have substantial investigatory powers and we can advise on search warrants, disclosure requests and interviews under caution.
The complexities of tax regulations, coupled with the stress of potential penalties and reputational damage, make it crucial to have expert guidance on your side.
At Primas Law, we pride ourselves on delivering the highest quality strategic legal advice when it matters most.
Primas Law brings a wealth of experience in handling HMRC investigations, ensuring that you have robust defence and strategic advice at every step. We understand that each case is unique, and our approach is tailored to meet the specific needs of your business. Whether you’re dealing with a routine inquiry or a more serious investigation, we provide comprehensive support to safeguard your interests.
Our experienced team can help with matters relating to:
To talk about your situation
John Hartley heads up Primas’ Business Crime and Regulation department and has more than 20 years’ worth of experience working across a broad range of legal matters.
Our experienced team have advised on the following scenarios:
HMRC does not itself take responsibility for deciding whether a matter should be prosecuted or not. In most cases HMRC will be investigating a fraud and their policy is to use Code of Practice 9 as a cost-effective civil fraud investigation. The HMRC investigation process typically follows these steps:
1.Notification: HMRC will inform you in writing that an investigation is being launched. The letter will specify whether it is a full or aspect enquiry.
3. Review and Analysis: HMRC examines the provided documents to identify any discrepancies or areas of concern. They may compare your records against industry norms or use data analytics to spot inconsistencies.
5. Resolution: Once the review is complete, HMRC will present their findings. If errors or discrepancies are found, they will propose adjustments to your tax liability. You may also face penalties or interest charges. If you disagree with the findings, you have the right to appeal.
2. Information Gathering: HMRC will request access to your financial records. This can include bank statements, invoices, receipts, payroll records, and other relevant documents. They may conduct the investigation at your business premises, HMRC offices, or your accountant’s office.
4. Meetings and Communication: HMRC may request meetings to discuss their findings and ask for further explanations. Clear and open communication is crucial during this phase to address any queries promptly.
Resolution: Once the review is complete, HMRC will present their findings. If errors or discrepancies are found, they will propose adjustments to your tax liability. You may also face penalties or interest charges. If you disagree with the findings, you have the right to appeal.
HMRC may invite a person to enter a Contractual Disclosure Facility, or CDF. This essentially invites a person to provide full and frank details as to any behavior which may have deliberately or unintentionally led to tax evasion. In return HMRC will not bring criminal proceedings. There is normally a deadline in which to accept the CDF.
It is important to engage with HMRC in this process and to seek specialist advice. Failing to reply to the CDF, or providing false or misleading information, may lead to a prosecution.
To assist in any investigation HMRC has the power to arrest, apply for search warrants and to freeze and recover assets.
Tax evasion refers to the illegal practice of deliberately avoiding paying taxes owed to HM Revenue and Customs (HMRC). This can involve underreporting income, inflating deductions, hiding money in offshore accounts, or engaging in fraudulent schemes. HMRC will approach each case differently and early engagement with the investigator may have a significant affect as to how the matter is concluded
The penalties following an investigation for tax evasion can be very serious and, depending on the nature of the investigation can include fines, imprisonment, directors disqualification and compensation. The agency’s approach is to deter evasion and promote compliance.
HMRC also has the responsibility for investigating business which may have breach the Criminal Finances Act by facilitating tax evasion.
An experienced solicitor can provide invaluable assistance during HMRC investigations by offering expert legal advice, representation and guidance. This assistance may shape the direction of the investigation as it progresses to ensure best possible outcome.
An experienced advisor can also devise strategic responses to HMRC queries, negotiate settlements, and mitigate potential penalties. Their expertise helps navigate the complexities of the law, reduces the stress associated with investigations, and increases the likelihood of a favourable outcome, protecting you, or your business’s interests and financial stability.
You will know if HMRC is investigating you when you receive a formal notification letter from them. This letter will outline the scope of the investigation, whether it’s a full or aspect enquiry, and detail the documents and information they require from you.
HMRC investigations can be triggered by several factors. Common triggers include discrepancies or errors in tax returns, late or incomplete filings, and unusual patterns of claims or deductions. Significant fluctuations in income, frequent losses, or large, unusual expenses can also raise red flags. Additionally, HMRC may initiate investigations based on information received from third parties, random selection, or industry-specific compliance projects. Businesses operating in high-risk sectors or those with a history of non-compliance are more likely to be scrutinised. Understanding these triggers can help businesses maintain proper records and ensure compliance to avoid investigations.
An investigation may also be triggered by insolvency proceedings.
HMRC uses a combination of risk assessment tools and data analysis to decide who to investigate. They analyse tax returns for discrepancies, unusual patterns, or errors that may indicate underreporting or fraud. Businesses with significant changes in income, high-risk industries, or inconsistent filings are more likely to be scrutinised. HMRC also receives tips from third parties and collaborates with other agencies to identify potential non-compliance. Random selection is another method used to ensure compliance across all sectors. These strategies help HMRC focus their resources on cases most likely to involve tax evasion or significant errors.
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