HMRC are facing increasing pressure to recoup the billions of pounds lost each year in unpaid tax. In a bid to do so, they initiate thousands of tax investigations annually to check that businesses are paying the right amount of tax. Facing a tax investigation can be a daunting, time-consuming and costly experience, but having a tax investigation lawyer by your side can significantly reduce the burden and increase your chances of achieving a favourable outcome. Our dedicated HMRC team deals exclusively with tax-related issues. Our vast experience with HMRC and our deep understanding of their investigative and compliance procedures enable us to give timely, practical and cost-effective advice, facilitate a swift resolution of tax matters, and allow our clients to get back to focusing on the continued success of their businesses.


For a confidential free discussion, call us today on 01908 414990,  alternatively email us at or complete our Free Enquiry Form and we will call you back.


What are Tax Investigations?

A tax investigation is where HMRC undertake an official investigation into your business’s tax affairs and payment history. Examples of specific investigations HMRC may carry out when delving into your tax affairs include the following:


  • VAT investigations.
  • PAYE and NI investigations.
  • Corporation tax investigations.
  • Code 9 (COP9) investigations.
  • Construction industry scheme (CIS) investigations.


What types of Tax Investigations are there?

Tax investigations can be one of three types: Aspect, full or random.

  • Aspect enquiry

In an aspect enquiry, HMRC investigate a specific aspect of your tax information. Whilst the outcome of this type of investigation is usually that the taxpayer made a mistake rather than acted dishonestly, the investigation must still be taken extremely seriously and addressed properly.

  • Full enquiry

When undertaking a full enquiry, HMRC will undertake a thorough review of your business’s tax returns and financial records. Generally speaking, HMRC carry out full enquiries when they suspect significant errors in the business’s tax affairs. When the business operates as a limited company, HMRC may investigate the tax affairs of the company’s directors as well as those of the company itself.

  • Random enquiry

In random enquiries, HMRC pick a business at random to investigate. Often, the business operates in a sector that HMRC have identified as being high risk.


What triggers a Tax Investigation?

A tax investigation can be triggered by a variety of factors, including the following:

  • Unusual activity in your tax returns or accounts.
  • You operate in an industry flagged by HMRC as being high risk for tax issues, such as those that deal mainly in cash.
  • You frequently file incorrect or late tax returns.
  • Your accounts are not in line with industry norms.
  • Your tax returns display inconsistencies in your trading patterns, such as large changes in income or expenses.
  • HMRC has received a tip off that your tax affairs may not be in order.


What happens during a Tax Investigation?

If HMRC decide to initiate a tax investigation into your affairs, they will send you a letter informing you of the nature and extent of the investigation. Often, the process begins gently, with HMRC requesting additional information relating to a specific tax return or transaction. It can then progress into a more extensive investigation.

HMRC may ask to visit you at your home or business premises to undertake the investigation, or request that you attend their offices. Your tax investigations solicitor can be with you during HMRC’s visit.

During their investigation, HMRC officers will review your tax returns, accounts, and other financial documentation, and ask you a number of questions. The level of detail they go into and the degree of scrutiny involved will depend on the reasons for the investigation.


What are the possible outcomes of a Tax Investigation?

Depending on what HMRC find during their tax investigation, the possible outcomes include the following:

  • If HMRC uncover no evidence of mistakes or wrongdoing, the investigation will be closed, and no further action will be taken against you.
  • If HMRC identify errors in your tax returns, you may be asked to make good any underpayments and pay interest and penalties.
  • If HMRC uncover deliberate wrongdoing, they may start legal proceedings against you. Generally speaking, HMRC favour civil proceedings over criminal ones since they result in a swifter recovery of the unpaid tax. However, HMRC can, and do, instigate criminal prosecutions when they consider it necessary.


How can we help with Tax Investigations?

Tax investigations can be stressful, time-consuming and expensive. Even when the tax investigation results in no further action being taken against you, the process can significantly disrupt your commercial operations and divert your attention away from working towards the continued success of your business. Our specialist tax lawyers can help alleviate the impact of a tax investigation. We will carry out as much of the work as possible on your behalf, freeing you up to concentrate on running your business. We will liaise with HMRC on your behalf, using our understanding of their policies and procedures to limit the extent of the investigation and protect your position. Where wrongdoing is identified, we will provide practical, straightforward advice on your position and negotiate the most lenient penalty available, avoiding the involvement of the court or tribunal wherever possible.


For a confidential free discussion, call us today on 01908 414990,  alternatively email us at or complete our Free Enquiry Form and we will call you back.