What does the start of a HMRC tax investigation feel like?

A letter arrives one day from HMRC - nothing strange about that.  A first glance at the contents, however, and you realise that this is not a routine communication. Your first call is to your accountant who arranges to see you later in the week.

You re-read the letter . Without giving any reasons or clues, HMRC are informing you that they have started “a full and complete investigation into your tax affairs”.  Your research on the internet reveals nothing but bad news - an HMRC tax investigation is always bad news.

At the meeting, your accountant explains how long the investigation will take and the information he will need from you. Again nothing but bad news.

You wonder whether to tell him about what you think may be the reason? But you’ve read that if you do he’s obliged to make a report to the authorities, without telling you. So you take a chance and keep quiet - in any case he’s an old friend and it’s a bit embarrassing having told him lies over all these years. You’ll go to the meeting and weigh up the odds when you meet the Tax Inspector. After all he might just be a pen pushing civil servant.

The big day arrives. You’ve not slept well and your wife’s asking what’s the matter. You can’t tell her for fear that she will never stop asking about the problem. You breakfast badly.

You arrive at the Tax Office with your accountant. There are two big Taxmen and one’s from Scotland. The meeting starts and you realise your accountant is out of his depth. The Scottish tax man just sits there watching you. The other one tells you the meeting will last all day and include visits to your home and business premises. Your heart sinks as they ask where you keep your valuables and you admit you have a safe deposit box. In it are the offshore bank statements and over £50,000 in cash from your off record sales.

You think of a plan. If you can delay the meeting until the bank closes you can get the bank manager to take the box to his home and replace it with another...

(This is based on a true story which will appear in “Tales of the Tax Men” - an insider’s story of how HMRC really works)

The moral of the story? Don’t underestimate HMRC. Prepare yourself by talking to our tax investigation specialists.