The study, by law firm Pinsent Masons, suggests many of these disputes are related to transfer pricing.
“HMRC’s inflexible approach to tax avoidance is driving delays as it frequently aims to win every point against the business. This can make it difficult to settle even the simplest disputes,” said Jason Collins, a partner at the firm.
Beware of ‘Connect’
HMRC now uses a sophisticated database called ‘Connect’ to start more than 80% of tax enquiries.
The system collects data from 30 different sources, including UK and offshore banks, Companies House, the Land Registry, estate agents, the DVLA and other licensing authorities, and social media.
However, investigations are often at random and can come at any time.
Protecting clients against protracted HMRC enquiries
Each year, we offer our clients a Tax Investigation Service, to cover our time and fees for representing and defending them, should they be chosen for investigation by HMRC.
This means that we can translate the many complicated questions the taxman may pose, manage the entire conversation with HMRC, help them submit any required information and minimise the impact on their business or personal accounts.
“HMRC is continually embarking on new ways to target you using a range of approaches and new technology. We are constantly vigilant and we stay up to date with the latest advances, but you are still at risk of an investigation at any time,” said Oscar Wingham, Tax Partner at Rouse Partners.
“Our Tax Investigation Service is a popular subscription service which allows us to represent our clients and defend them for as long as it takes to resolve,” added Oscar.
We are currently inviting our clients to join this year’s Tax Investigation Service by mailing and email. If you have any further questions about this service, please contact us.