How a taxpayer answers HMRC questions, can have a huge impact on the outcome of an investigation. HMRC will ask a number of probing questions at a meeting. It’s imperative to know when NOT to answer a question and HOW to answer a question.
Clients and taxpayers may be nervous about handing over documents to HMRC. Will they explain everything, or will it just provoke even more questions?
It is important for tax purposes to establish from the outset whether taxpayers are investing in property or trading in property as the tax treatment can vary significantly.
You have worked all your life to build up a successful business and now its time to cash it all in and sell up. You have found a buyer and they are willing to pay the full asking price, no quibbles. So why should you beware of the taxman?
A taxpayer’s financial affairs can be complicated. But HMRC can ask a never ending stream of questions that can make no sense, or seem to be irrelevant or ask the same question but in a slightly different way. Enough!
According to City AM, HMRC continue to pursue non compliant UK taxpayers by issuing nudge letters. As previously covered, HMRC’s use of nudge letters is a cost efficient way of recouping tax for the Exchequer without the need to launch a tax investigation into a taxpayer’s past tax compliance. But beware, there are risks for both taxpayer and adviser alike.
January is a funny month. The festive celebrations have been and gone. A lot of taxpayers turn to filing their Self Assessment Tax Return by the end of the month. Others are simply looking backwards and forwards and thinking how are they going to fair in 2022. So why is now possibly a good time to push for a Settlement if you are under a tax investigation?
For many taxpayers, a brown envelope from HMRC will not be well received at any time of the year. Odds on it will contain bad news. It may be the start of an investigation. It may be a “nudge letter” or a “Check on tax position”. It almost certainly won’t be a Christmas card!
For some, kicking the can into the long grass might be even more preferable. Either way, when the time actually comes to resolving the matter, it will almost certainly be more expensive. And perhaps all you have had in between times is depression and sleepless nights.
HMRC holds a wealth of information on all taxpayers. Not surprisingly though, from time to time HMRC can come across information on a taxpayer that they did not expect. You may think that you have disclosed everything but now HMRC is challenging you and want to investigate your tax affairs.