Tax investigations can be daunting, time-consuming, and financially draining for both businesses and individuals. But what exactly is a tax investigation, and why is it so important to have proper protection in place? Understanding Tax Investigations is the first step towards protecting yourself and your business.
What is a Tax Investigation, Let’s Understand it More…
A tax investigation is an enquiry conducted by the tax authority (e.g., HMRC in the UK) into the financial affairs of an individual or a business. The objective is to ensure that the correct amount of tax has been paid, and the right tax reliefs and allowances have been claimed. These investigations can be random or triggered by discrepancies in one’s tax returns, and the depth and breadth of the enquiry can vary significantly. Understanding why a tax investigation is necessary is often the first hurdle.
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Understanding Why Tax Investigation Protection is Necessary?
Financial Implications
An in-depth tax investigation can result in substantial professional fees, even if no additional tax is found to be due.
Complexity
The intricacies of tax laws and the depth of investigations can make it challenging for individuals and businesses to represent themselves effectively.
Peace of Mind
Knowing that you have a protection service in place can provide immense relief, ensuring that you’re supported during potentially challenging times.
The Surge in HMRC TAX Investigations: An Analysis & Understanding
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Why the Sharp Rise in Tax Investigations?
In 2022, a striking 265,000 tax investigations into taxpayers were initiated by HMRC. This marked increase in scrutiny persisted into 2023 as the department ramped up its compliance activity. The reason? A concerted effort to reclaim funds expended during the pandemic. A significant driver behind this surge is HMRC’s sophisticated data analysis system, ‘Connect’. This tool has empowered the department to cast a wider net, ranging from routine VAT or PAYE assessments to in-depth assessments of individual fiscal matters. With the backing of ‘Connect’, HMRC’s capacity to examine business records, execute unannounced site visits, and probe into financial matters stretching back as far as two decades has grown significantly.
The Weight of Undergoing a Tax Investigation
Finding oneself at the centre of a tax investigation can be overwhelming. The process can be invasive, leading to significant disruptions, mounting stress, and eventual financial implications. Even those with impeccable financial records aren’t immune; a substantial number of tax enquiries by HMRC are entirely arbitrary. Understanding Tax Investigations and protecting yourself and your business is a modern necessity.
A thorough investigation often involves extended interactions with HMRC, some of which can stretch over two years. Hence, if you’re contacted by HMRC about any potential probe into your tax dealings or a compliance visit, it’s crucial to consult with your adviser promptly. Swift action ensures you garner the right counsel and set the stage for an optimal resolution.
DonnellyBentley’s Tax Investigation Protection Service – What’s on Offer?
DonnellyBentley’s Tax Investigation Service, valid from 1st June 2023 to 31st May 2024, is robust, providing clients with comprehensive protection against the financial strain of investigations. Sign up at any point in the year and you will be charged a pro-rata rate. The personal tax rate remains the same all year. Here’s what the service entails:
Fully-Backed Insurance Policy
Partnered with Markel Tax, this service is backed by an insurance policy that provides fee protection of up to £125,000.
Wide-Ranging Protection
The service covers a plethora of tax investigation areas such as Corporation Tax Returns, VAT disputes, Employer Compliance, and even specific checks like the Coronavirus Job Retention Scheme (CJRS) claims.
Business Hub Access
Subscribers gain access to Markel Law’s Business Hub, a treasure trove of DIY legal templates, advice, and guidance on essential business topics ranging from trading and contracts to health and safety.
24/7 Legal Helpline
Subscribing businesses get round-the-clock access to legal advice from a team of 70 expert barristers and solicitors, covering commercial advice, employment advice, and health and safety advice.
However, clients must be aware of the specific restrictions to this service, which include fees incurred prior to written acceptance, late submissions, and cases where there is no viable chance of challenging HMRC, among others.
Find out more about our Tax Investigation Service
Why Choose DonnellyBentley?
When facing a tax investigation, having an experienced and supportive team by your side is crucial. Here’s why DonnellyBentley stands out:
Expert Representation
If a client faces an investigation, DonnellyBentley will represent you, ensuring that the enquiry is handled with the utmost professionalism and expertise.
Financial Security
Any costs incurred for subscribing clients during an investigation will be reclaimed directly from the insurance company.
Value-Added Services
From legal portals to helplines, DonnellyBentley goes beyond just tax investigation protection, offering services that can be invaluable to businesses.
Tax investigations are an integral part of the financial landscape
Proper protection not only safeguards against unforeseen financial implications but also provides peace of mind. With DonnellyBentley’s comprehensive service, clients can be assured they are in capable hands, ready to navigate the complexities of any investigation.
Don’t leave your financial future to chance; trust in the expertise of DonnellyBentley.
