Any individual or business who submits a tax return could become the target of an HMRC enquiry.
The purpose of the enquiry is to ensure that you have paid the correct amount of tax. However, HMRC do not need to justify opening an enquiry and they can often be opened completely at random with substantial fees incurred by a professional advisor defending the enquiry, even if at the end it is deemed that there is no additional tax to pay. In recent years HMRC have become far more sophisticated in this respect with an investment in technology that allows tax enquiries to be selected more efficiently and on a larger scale. In addition, HMRC powers to investigate have been strengthened. This combination means that all taxpayers are now at greater risk of being investigated than ever before.
It is possible to purchase insurance, at a relatively low cost, that will protect against professional fees incurred if you are selected by HMRC for enquiry.
The Scottish Grocers Federation are delighted to announce a fantastic new member benefit that provides access to one such Policy provided by Vantage. As an association we have been able to negotiate discounted rates in this respect.
This product includes the following benefits:
- Cover for up to £100K of fees incurred by Vantage experts representing you in the event of an HMRC enquiry.
- Includes cover for full & aspect enquiries and PAYE & VAT Compliance Visits.
- Unlimited telephone access to Vantage tax consultants in respect of any tax or VAT questions you may have.
- Complimentary telephone access to Vantage Employment and Health & Safety consultants for any issues may encounter in these complex areas.
- And finally telephone access to Vantage’s legal advisors in respect of any commercial or personal legal questions you may have.
Full details of this product can be viewed at https://scottishshop.qdosconsulting.com where you can also purchase this product via the Vantage on-line Webshop.
HMRC Enquiry Examples
‘Business accounts for a retail shop were challenged by HMRC. HMRC claimed that expenditure of more than £150,000 on improvements to the front of the shop and interior were not allowable for tax purposes and that additional tax of £30,000 was due. Further research into the relevant tax law and case law was necessary to dispute HMRCs contentions. In the end HMRC allowed the expenditure in full and fees of £3,000 were covered by the insurance.’
‘A retailer that operated as a husband and wife partnership was subject to a full enquiry by HMRC. The inspector requested sight of all records, although gave no indication of any wrong doing. After 8 months of meetings and exchanges of in-depth correspondence it was successfully negotiated that no amendments were required or additional tax due. Fees of £2,500 were covered by the insurance.’