There are many types of Investigations:

Special Civil Investigations

These are carried out by a dedicated HM Revenue & Customs department, looking at cases where there may be a considerable tax loss. The normal focus for this type of investigation is for cases where the tax fraud is suspected to be in excess of £500,000.

With such an investigation there is a possibility of criminal prosecution.

Civil Investigation of Fraud

Similar to the Special Civil Investigations, these cases are for serious tax fraud with the expected tax loss thought to be between £75,000 to £500,000.

Provided that the individual makes a full disclosure of the tax fraud and it is agreed that the case is to be dealt with under the Civil Investigation of Fraud procedures, then the Revenue will not seek legal prosecution.

Corporate Tax Investigations

Enquiries into a Company Self Assessment Tax Return may be either in the form of an aspect enquiry or a full enquiry.

An aspect enquiry will look at a particular area of the company’s financial statements and can often be concluded quickly once the Revenue’s concerns have been satisfied. However, should the Revenue discover other information that identifies the possibility of tax irregularities then this will turn into a full investigation.

This type on enquiry is normally dealt with by the local district by an Inspector with the necessary skills and experience.

For owner managed business it is common for an enquiry to be opened into the director’s personal affairs at the same time as a company enquiry.

Income Tax Investigations

Enquiries into an Individual Self Assessment Tax Return may be either in the form of an aspect enquiry or a full enquiry.

An aspect enquiry will look at a particular area of the Return and can often be concluded quickly once the Revenue’s concerns have been satisfied. However, should the Revenue discover other information that identifies the possibility of tax irregularities then this will turn into a full investigation.

This type on enquiry is normally dealt with by the local district by an Inspector with the necessary skills and experience.

PAYE Compliance Reviews

A review of the employer’s accounting records to ensure that it is complying with all its statutory obligations relating to PAYE and National Insurance.

Such a review will include:

  • Benefits in Kind (P11d)
  • Status of workers
  • Operation of PAYE
  • IR35

The review will take place at the business premises and will initially involve a review of the previous three years’ records.

VAT Investigation

Often, where tax fraud has been discovered, there will also be VAT Fraud.

HM Revenue & Customs will also carry out VAT Inspections, which are a review of the business’s records to ensure that the business is complying with the VAT regulations.

Status Enquiry

A status enquiry will often fall part of a PAYE Compliance Review. However with the recent inclusion of a box requesting details of income derived from services companies on the Self Assessment Tax Return and a request on form P35 Employer’s Annual Return to confirm if IR35 regulations have been applied to all income from Service C

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