5 Tips to Avoid HMRC Investigations & Settle Disputes

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Every year, HMRC opens investigations when there is any suspicious activity. In 2021, the HMRC’s fraud investigation services recovered more than £1 billion. However, not all businesses or individuals that are suspected of fraud and tax problems are committing these crimes. Here’s how to avoid investigations and settle disputes when that happens.

1. Document Everything

It’s unnecessary that you did something wrong or committed a crime for HMRC to launch an investigation. They can launch it to clear up some concerns or questions they have. They might not understand some of the documents that you submitted, or some might have been missing.

To avoid that happening, document everything. If there is an enquiry, hold all letters between yourself and the HMRC. If you were exchanging documents with them, keep copies of all the documents. Also include notes of phone calls, emails, and any other interaction. Also, send your information through recorded delivery for proof of postage.

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2. Get A Professional Involved

The best way to avoid an HMRC investigation is to ensure that all your taxes are filed correctly. HMRC uses enquiries to ensure that people are paying the right amount of tax. You can do it with the help of professional chartered tax advisers and accountants. People are increasingly hiring professional tax and accountancy services for this purpose, which has also led to a 6% growth in the industry.

3. Know Your Rights & Safeguards

When you’re under enquiry, rights and safeguards are highlighted in the HMRC charter. Some you should be aware of are as below:

· HMRC’s request must be reasonable to carry out an inspection.

· HMRC needs to give you at least a seven-day notice.

· If HMRC shows up unannounced, you don’t have to let them in.

· They must give clear notice of what happens in case of obstructing inspections, so you don’t unknowingly do it.

· HMRC typically cannot enter residential premises.

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4. Alternative Dispute Resolution

Taxpayers can settle disputes quickly through Alternative Dispute Resolution (ADR). It’s a one-day hearing that involves a mediator, HMRC employee or a third party to settle the dispute between taxpayer and revenue.

5. Voluntary Settlement

If you’re a contractor involved in a similar dispute that’s been defeated in courts, there are a few chances of winning. You can consider a voluntary settlement in such cases. But before you resort to this, consult a tax specialist to review your case.

Avoid Investigations and Settle Disputes Quickly

Chartered tax advisers and accountants have the skills and knowledge to guide businesses in tax matters to avoid disputes. However, sometimes disputes are inevitable, so you’ll also need someone to settle them quickly. For help with both tasks, contact the best tax advisors in London, IBISS & CO. The tax and accountancy firm offers general and specialist services like business and tax advice in London and Walsall. You can also contact them for services like tax investigations, corporation tax, and more. Contact them for more details on their services.