Let’s look at how HMRC chooses individuals and businesses for enquiry once it has received returns:
The current tax gap is estimated to stand at just shy of £34bn, with the largest proportion of the gap due to income tax, national insurance contributions and capital gains tax. As a result HMRC focuses its attention on small and medium enterprises and individuals who make mistakes with their accounts or simply fail to take reasonable care in checking that their tax returns are accurate and complete. £4.6bn of this is attributed to Self Assessments. Such figures help explain why HMRC does not pursue big business as robustly because its calculations suggest that individuals and smaller businesses are higher risk and responsible for a greater share of tax escaping the Chancellor’s co ers.
This is why Tax Investigation protection is so vital to individuals and businesses. If you have filed your tax returns on time and then receive the dreaded enquiry letter from HMRC, the protection provides peace of mind that you can a request a full defence. However, there are terms and conditions to be aware of, for example tax avoidance or criminal enquiries are not generally covered.
For further information please contact us here at Middleton Accountancy Services.