Protect your business with Price Bailey’s Tax Investigation Service

Did you know that a simple tax investigation could cost your business thousands of pounds in professional fees?

What is the Price Bailey Tax Investigation Service (TIS)?

Our Tax Investigation Service (TIS) covers our professional fees incurred in assisting with HMRC enquiries. This means that if your business is selected for an HMRC enquiry, you won’t have to worry about the cost of our services.

More details on the cover provided can be found here.

A real-life example…

Between September 2022 and February 2024, a hospitality client in Norwich underwent an exhaustive HMRC enquiry. During this process, we were required to provide electronic copies of all purchase invoices, reconciliations of credit card expenditure, detailed analyses of expenditure with accompanying narratives, attend meetings with the client, and engage in discussions with HMRC on various matters such as business vehicles. We also had to provide thorough explanations of account adjustments and a comprehensive description of how income is recognised in the primary books of record. We suspected that this enquiry was random.

During this period, we invoiced £11,000 for our time spent working on the enquiry, while the tax cover paid by the partnership and associated partners was only £420. Andrew Park, Tax Investigations Partner at Price Bailey, also assisted with the response and challenged some of the assumptions made by HMRC when the enquiry neared a conclusion.

The resultant HMRC conclusion after that long period was to disallow only ~£3,000 of expenditure.

Why you need our Tax Investigation Service

This particular enquiry was dealt with entirely by email, and HMRC declined to visit on-site. This demonstrates that this method of enquiry will be more common, potentially leading to further random enquiries.

Over the past few years, Company accounts have been submitted to HMRC electronically alongside the Corporation Tax return. This means that profit and loss details are being submitted directly into the HMRC system, and any significant variances can be recognised instantly. The Chancellor announced in the 2024 October Budget the intention to recruit an additional 5,000 officers to close the tax gap, we have recently seen more aspect enquiries. With increased capacity through people and technology we expect this activity to continue to grow.

We are also seeing more VAT return enquiries, particularly those who regularly get refunds.

Following the 2024 Spring Budget, HMRC is investing further resources to reduce the tax gap, and we are expecting further enquiries to emerge.

Beware of Fake HMRC Letters

Sadly, we are also seeing fake HMRC letters, whereby you will receive a letter appearing to be from HMRC asking for routine information such as personal identification and information about the directors. Any correspondence received from HMRC should always be checked by your accountant and tax adviser.

Take Action Now

Hopefully, the example above will encourage you to consider our Tax Investigation Service if you have previously opted out. The client referred to above is certainly grateful they did! To find out more information or to speak to one of our experts, please contact us below…