What is it really like to be investigated by HMRC?

Although very different cases, all three individuals had things in common. They all experienced the worry and embarrassment of being under investigation and had all been treated very poorly, and unfairly, by HMRC.

Becoming the subject of a criminal investigation

Our first speaker was accused of fraud and became the subject of a criminal investigation after making a voluntary disclosure to correct his position. He admitted to making mistakes in his affairs, but it was clear he had not benefitted from his actions and had not intended to deceive or defraud HMRC. Despite this, HMRC still pressed ahead and he found himself preparing not only for the loss of his business but also his freedom.

Thankfully he came to Buzzacott where we provided HMRC with an expert report detailing his actions and making the case that prosecution was not only uncalled for in the circumstances, but was also not in the public interest. HMRC eventually accepted this and the case was settled with the minimum financial penalty allowed under civil law.

Ten year investigation, despite following HMRC’s own advice

The second speaker informed guests that she and her husband had been subject to a long running enquiry, after following advice from an HMRC employee that later proved to be incorrect. HMRC did not dispute the fact the advice was given, or that the clients had no reason to suspect the advice was incorrect, nevertheless, they still claimed she and her husband had deliberately filed an incorrect return and should be punished accordingly. 

Our client reflected on HMRC’s dismissive and accusatory approach to their case and commented on the marked change in HMRC’s approach following the appointment of Buzzacott. HMRC are now listening to the representations being put forward, and the couple feels they are at last being treated fairly.

Unnecessarily prolonged investigation

Our final speaker had been subject to an enquiry lasting seven years. The client incurred significant losses during the global recession of 2008 and claimed tax relief accordingly. HMRC believed that the accountancy advice he had followed at the time was incorrect, and, due to the time taken to conclude the investigation, he was no longer able to claim any relief at all. Not only this, he was also accused of having acted deliberately, despite having followed professional advice. 

Buzzacott first persuaded HMRC that the client had not acted deliberately, and then demonstrated how the client was able to use previously unclaimed losses against the tax liability. After seven years, HMRC settled the case for less than £5,000, having originally been seeking more than £350,000.