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Do you complete a tax return each year? Around 10 million self assessment tax returns are submitted to H M Revenue & Customs (HMRC) annually, and each year HMRC open enquiries into a selection of these returns. Nothing too surprising about this, but what might surprise you is that a Freedom of Information disclosure has confirmed that the chances of being one of the unlucky ones who is selected may have recently doubled!
As reported this month in The Daily Telegraph, the number of people being investigated by H M Revenue & Customs (HMRC) has doubled in one year, raising concerns that people who have made innocent mistakes are being targeted, possibly in a bid by HMRC to tackle the estimated £35 billion of tax they reckon is “lost” annually.
HMRC opened enquiries into more than 237,000 tax returns last year, almost double the amount opened in the previous year (about 119,000 in 2011-12). The number of self-employed people investigated has quadrupled in that time, while annual prosecutions have risen sevenfold in three years.
It has been suggested that the increase has been due to HMRC focusing on those groups who, being generally upstanding and responsible individuals, might simply agree with HMRC without considering the queries in more detail, in order to resolve the issue quickly. Although HMRC denies this, Conservative MP Brooks Newmark has accused HMRC of “nit-picking”, and suggested that some people selected were “easy targets”, and that HMRC “had been given an aggressive mandate to collect tax”.
Last year HMRC continued to redeploy staff to help meet increased enquiry targets, with the number of investigators employed to crack down on anti-avoidance and evasion rising over the last three years to a total of 1,600, resulting in a huge £23.9 billion being recovered in additional revenues.
Encouraged by these impressive results, HMRC is to build on its success, and with continued support from the Government, expects to secure a total of £100 billion from enquiries in the five years to March 2015.
You’d be forgiven for seeing double after all these numbers, but it seems clear that HMRC are launching an ever increasing number of enquiries into taxpayers’ affairs. This is where we can help, by providing you with insurance to cover the professional costs of dealing with such an HMRC enquiry. In our experience, many enquiries (whether straightforward or more technical) are closed with no changes needed, but it can still be extremely time consuming to reach this conclusion.
Many professional bodies offer cover via their membership fees, but this is often limited, and may not cover all types of HMRC enquiries. With premiums starting from as little as £80 plus VAT per year, our professional fee insurance covers the entire range of potential HMRC enquiries. If you don’t already have this valuable cover with Springfords and would like to know more, please get in touch with Jane Carmichael (email@example.com), who’ll be happy to help – it’s no trouble at all!!!
This is a general guide which is intended to give background information and is not a substitute for taking specific advice based on your particular circumstances.