Whilst many businesses are subject to the scrutiny of HMRC and all must adhere to HMRC policy, in some instances certain companies may find themselves facing an HMRC tax investigation. The nature of a tax investigation varies depending on which information or data the HMRC wishes to examine. The stress of responding to HMRC enquiries along with unpredictable nature of an investigation can have a significant impact upon the functioning of the business and result in negative consequences for the company. If the company management team are forced to handle the tax investigation, the day-to-day running of the business can suffer and lead to a loss in productivity and overall profitability.
In order to limit or avoid damage to the business during an investigation, many companies rely on HMRC tax specialists to provide advice regarding the nature and scope of investigations. By gaining an insight into the way in which the HMRC operates, companies can equip themselves to respond to the HMRC appropriately and as quickly as possible thus reducing the negative impact on the business. In addition to providing expert advice, tax investigation specialists can take a more involved role and effectively handle the investigation on the company’s behalf. Due to their understanding of the way in which the HMRC works and knowledge of their procedures and protocols, tax investigation specialists are generally aware of how an investigation will be undertaken and what measures a company must take in order to bring the matter to a close without further harm or disruption to the business.
AN HMRC tax investigation can be extremely stressful for a company, its Board of Directors and its employees. By removing this burden, tax specialists enable the management team to focus on running the company and handle all correspondence with the HMRC throughout the course of the investigation. Whilst some companies may rely on their in-house team to deal with HMRC investigations, they often require additional support. Tax specialists can offer this added support and advice to in-house team as well as acting on behalf of companies who do not have these resources within the company.
The complexity of revenue legislation in conjunction with the intricacies of HMRC guidelines means that companies can have difficulty in identifying compliance requirements or ensuring there are fulfilling their obligations whilst operating in a tax efficient manner. Should an investigation take place, they may not have sufficient resources or knowledge to cope effectively and respond to HMRC enquiries in an appropriate timeframe. Tax investigation specialists are aware of the relevant law and regulations as well as being experienced in HMRC investigation procedure. This enables them to predict the nature of the investigation and respond accordingly. By doing so, they take control of the investigation rather than simply responding to it and aim to resolve the matter quickly, efficiently and in the most cost effective manner possible.
Whilst companies are under no obligation to engage the use of tax investigation specialists prior to or during an investigation, it can be extremely cost effective for the company to do so. Without the use of specialists, companies may use company resources unnecessarily whilst attempting to deal with the issue in-house and fail to resolve the matter as quickly as specialists would be able to. Furthermore, the outcome of the investigation may not be as beneficial for the company without advice from tax investigation specialists. By relying on expert advice, support and assistance, companies can ensure they respond to the HMRC appropriately, meet the needs of the investigation, protect their business and bring the matter to a swift and successful close.
Baker Tilly is an independent firm of chartered accountants and business advisers, positioned as one of the leading mid-tier accountancy firms. Baker Tilly specialises in HMRC Tax Investigation solutions to corporate organisations.
For more information, please visithttp://www.bakertilly.co.uk/services/tax/tax-risk-and-investigation-management-services.aspx