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A seaside café was investigated by HMRC and the VAT Inspector demanded an additional £19,000 of VAT duties that supposedly related to zero rated cold takeaway sales. A full defence proved that not only was the Inspector incorrect, but that the business was due a £500 VAT rebate! The representation costs to handle this case exceeded £5,000. |
Real Life Tax Investigations
What these studies show
- Investigations cost time and money
- Expert defence is often required
- You needn't be in the wrong for investigations to cost you money
- Costs can be significant
- Even if cases conclude with no penalty you will still have representation costs to pay
You may fall victim...
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A plumber was subjected to a two year enquiry into his business. The Inspector spent a considerable amount of time reviewing all the books and records including bank statements, diary entries and sales invoices. No additional liability was found but the defence fees dealing with the Revenue’s questions amounted to £6,600 to show the Return was in fact correct. |
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A hairdresser was selected for investigation and inaccuracies in cash sales were identified. A thorough, robust defence ensured that the business was defended properly and ultimately the settlement demanded by HMRC was reduced by almost £80,000! The representation fees during this enquiry were in excess of £6,500. |
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A doctor was subjected to enquiry for over a year with HMRC looking at mileage expense claims and arguing as to whether his home was his base of work. The enquiry resulted in an adjustment to the private motoring figures but defence fees of over £7,000 were incurred handling the Revenue’s allegations. |
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A car dealership with a turnover of over £8m was investigated with HMRC looking at stock adjustments and PAYE compliance. Even though the enquiry lasted only 9 months and relatively minor adjustments for NIC were required, representation fees in excess of £14,000 were incurred in this short period. |