Time to take control
In the UK, a taxpayer (an individual, partner, company or trust) can be investigated by HM Revenue & Customs for any number of reasons. Most investigations fall under one of two categories: those seeking a civil Settlement of taxes due or those under criminal prosecution. More and more tax investigations are focussed on income and/or gains arising overseas.
For any taxpayer, the mere thought of an investigation can be worrying, but accepting and facing the investigation should be seen as the start of putting matters right. By seeking professional advice you will begin to take charge of the situation and take away most of the distress and anxiety that a tax investigation can cause.
Civil settlement
Tax evasion
Tax evasion is illegal. Taxpayers can be suspected of tax evasion by HM Revenue & Customs as a result of their actions even though there was no deliberate intent by the taxpayer to evade tax. Taxpayers may be investigated under the Contractual Disclosure Facility and Code of Practice 9.
Tax avoidance
Tax avoidance is legal. However, since the coalition government came to power facing a substantial budget deficit, HM Revenue & Customs has been tasked with challenging all forms of tax avoidance including schemes. Taxpayers may be challenged under Code of Practice 8.
Criminal prosecution
The decision to prosecute any taxpayer is not taken lightly. HM Revenue & Customs has its own stated Prosecution Policy. Ordinarily, HM Revenue & Customs will ratchet up an investigation from a civil basis to a criminal basis if further information of tax fraud is obtained during their investigation.
A criminal investigation will not be reduced to a civil investigation except in certain circumstances and only at the very beginning of their investigation. In such circumstances, time is of the essence.
Taxpayers should take time to consider how to handle a tax investigation in order to minimise disruption to your day to day life.
If you wish to discuss this or any other matter with a member of the team, please contact us.
If you cannot find the information you need on our website, please contact Paul Malin or Andy Maxfield using our contact form or email directly to pmalin@hwca.com or amaxfield@hwca.com