Tax investigations
and disputes:
Achieving the best
outcome
Tax Investigations
PRECISE. PROVEN. PERFORMANCE.
Tax investigations and disputes:
Achieving the best outcome
HM Revenue & Customs (‘HMRC’) has a growing appetite for
launching investigations where it considers there is a reasonable
possibility of collecting additional tax liabilities. As a result, more
individuals and businesses are finding themselves subject to a tax
investigation or intervention without there necessarily being any actual
wrongdoing. Unsurprisingly, this has led to a significant rise in the
number of unresolved disputes with the Taxman.
inherently complex, with scope for ambiguity
Why do tax investigations need
careful handling?
and differences of interpretation as between
Whilst some investigations can be relatively
the taxpayer and HMRC. Whether it is the
straightforward, others can be far more
application of complicated transfer pricing
wide-ranging, complex and potentially
rules to multinational corporations or the
serious in terms of the penalties that may be
remittance rules for non-UK domiciled
sought by HMRC. An enquiry for example
individuals, HMRC is increasingly targeting
into the corporation tax return of a company
taxpayers who it considers are at risk of not
could lead to HMRC questioning related
paying the right amount of tax.
areas such as VAT, PAYE or even the personal
We all know that the UK tax system is
tax affairs of the company’s directors.
Moore Stephens has an expert Tax
Investigations and Disputes team with
In addition to tax technical issues and
extensive experience in handling HMRC
penalties, tax investigations often require
investigations and disputes. Our aim is to
consideration of areas such as limitation, in
achieve the best possible outcome for our
other words how far HMRC can go back if
clients, whilst always complying with tax
an error or omission has been identified.
legislation.
These issues require specialist advice in order
to maximise the chances of a successful
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Tax Investigations
Why are tax investigations on
the increase?
conclusion to the investigation.
Intensive bursts of compliance activity by
How far can HMRC go?
HMRC are targeting individuals and business
In cases where HMRC suspects serious tax
sectors considered to be high risk, often
fraud or evasion, a Code of Practice 9
underpinned by detailed information gathered
investigation may be opened by HMRC’s
by HMRC. Tax Inspectors are also making use
Specialist Investigations unit. Under this
of new media, such as the internet, to identify
code, the recipient is offered the chance to
for example individuals with valuable assets.
make a full disclosure under the Contractual
Information sharing agreements between
Disclosure Facility (‘CDF’). Providing a full
national tax authorities are also beginning to
disclosure is made, HMRC will not pursue
have a major impact, for example in the case
the matter as a criminal investigation. Other
of UK-resident taxpayers holding accounts or
cases where HMRC suspects there is a
assets in Liechtenstein, Switzerland and the
significant loss of tax, possibly through tax
Crown Dependencies of Guernsey, Jersey and
avoidance schemes, will be dealt with under
the Isle of Man.
Code of Practice 8.
In respect of offshore assets (including bank
explaining any mitigating circumstances and
attend meetings on your behalf, creating a
accounts) HMRC may write to individuals
always seeking to achieve the minimum
‘buffer’ between you and HMRC. That said,
asking them to certify whether they are UK
possible penalty.
we will always keep you fully informed of
tax compliant in respect of those accounts.
progress with HMRC. Where we believe it
would be beneficial to meet with HMRC
income and gains which have arisen in the
Resolving an existing dispute
with HMRC
account, but also to the funds deposited into
Whether as a result of an investigation
and prepared for the meeting.
the account in the first instance.
or other intervention by HMRC, you may
The certification applies not only to the
officials, we will ensure you are well briefed
have reached the point where agreement
In terms of the investigation process itself,
The investigation process
cannot be reached with HMRC. Areas of
we are experienced in preparing disclosure
Increasingly the investigation process may
disagreement may include the amount of tax
reports to HMRC and handling meetings
involve an initial meeting with HMRC, which
that is due (and the interest thereon) or the
with Tax Inspectors and Senior HMRC
Moore Stephens would normally attend on
amount of a penalty which is being sought.
officials. When addressing technical matters,
behalf of the client. If irregularities are
we involve in-house experts in all relevant tax
identified, it may be necessary for a
We can discuss with you the options for
disciplines, including income tax, inheritance
disclosure report to be prepared, covering all
resolving the dispute which may include
tax, corporation tax, VAT and payroll taxes.
issues in the scope agreed with HMRC. The
further dialogue with HMRC or, where
We can also call on the skills of other teams
preparation of this report requires great care,
appropriate, litigation before the Tribunal.
within Moore Stephens, such as forensic
as HMRC has the right to prosecute where
Between these two options lies the possibility
accounting specialists, who can perform
the taxpayer makes material misstatements
of resolving your dispute by using the HMRC
reviews of bank statements and company
during the course of the investigation. The
Alternative Dispute Resolution (‘ADR’)
accounts. In some cases, we can bring in
disclosure report must therefore detail all
service. ADR is a mediation process which is
members of the Moore Stephens accounting
irregularities – whether it be overlooked
particularly suited to fact specific issues or
and audit teams, who have expertise in a
income, wrongly deducted business expenses
cases where there may be a range of possible
wide range of industry sectors.
or undeclared capital gains.
outcomes which are permissible under tax
For clients with international tax affairs,
law. Compared to litigation, costs are
we will work with our extensive network
relatively low and are shared with HMRC.
of member firms of Moore Stephens
Once the final disclosure report has been
submitted to HMRC for review, the process
International where necessary to ensure that
moves on to the agreement of tax liabilities,
How can Moore Stephens help?
interest and penalties. Interest on unpaid tax
Tax investigations and disputes can be
is always fixed, but some element of the
stressful and cause disruption to you or your
penalties are negotiable. Depending on the
business. Our approach is to control the
nature of the irregularities, penalties of up to
process on your behalf and therefore reduce
200% of the unpaid tax may be charged by
the impact on you. We will for example deal
HMRC. Our approach is to negotiate hard,
with all correspondence with HMRC and
overseas tax matters are dealt with efficiently.
Tax Investigations
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About Moore Stephens
Moore Stephens is a top ten accounting and
advisory network, with offices throughout the
UK and member firms across the globe.
Our clients range from individuals and
entrepreneurs, to large organisations and
complex international businesses. We
partner with them, support their aspirations
and contribute to their success. In-depth
understanding of our clients allows us to deliver
focused accounting and advisory solutions,
both locally and globally.
Contact information
If you would like further information on any item within this
brochure, or information on our services please contact:
Dominic Arnold – Head of Tax Investigations and Disputes
T +44 (0)20 7651 1638
[email protected]
Clients have access to bespoke services and
solutions, including audit and assurance,
business support and outsourcing, payroll and
employers’ support, business and personal
tax, governance and risk, corporate finance,
forensic accounting, wealth management, IT
consultancy, and restructuring and insolvency.
Matthew Watkins – Senior Manager
Our success stems from our industry focus,
which enables us to provide an innovative and
personal service to our clients in a range of
sectors.
Davina Boodnah – Manager
T +44 (0)20 7651 1623
[email protected]
T +44 (0)20 7651 1060
[email protected]
Moore Stephens globally
Moore Stephens International is a top ten
global accountancy and consulting network,
headquartered in London. With fees of over
US$2.74 billion and offices in 108 countries,
clients have access to the resources and
capabilities to meet their global needs.
Christy Kalispera – Associate
T +44 (0)20 7651 1170
[email protected]
By combining local expertise and experience
with the breadth of our UK and worldwide
networks, clients can be confident that,
whatever their requirement, Moore Stephens
provides the right solution to their local,
national and international needs.
Tax investigations helpine:
T +44 (0)20 7651 1400 (24 hours)
[email protected]
Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB
T +44 (0)20 7334 9191
www.moorestephens.co.uk
We believe the information contained herein to be correct at the time of going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action
or refraining from action as a result of any item herein. Printed and published by © Moore Stephens LLP, a member firm of Moore Stephens International Limited, a worldwide network of
independent firms. Moore Stephens LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Authorised and regulated
by the Financial Conduct Authority for investment business. DPS24082 June 2017