By Steven Pinhey, Head of Tax Disputes and Resolution
020 7490 7766
HMRC are carrying out more raids on premises of businesses and individuals it suspects are underpaying on tax. HMRC searched 761 properties in the last year, a 28% increase on the 593 property raids carried out the year before.
View our infographic for a brief overview.
Over recent years HMRC has been under growing pressure to increase the number of successful prosecutions for tax offences and the improved powers to raid premises is one of the new tools HMRC has been granted in order to achieve this goal.
By raiding the premises of the business or individual it believes to have underpaid on their tax HMRC can seize vital information and evidence to help secure prosecutions.
However, property raids and other aggressive methods used by HMRC inadvertently target innocent taxpayers who made mistakes or were badly advised being subject to an investigation by the Revenue.
As you can imagine, HMRC investigations can be very costly, disruptive and stressful for taxpayers at the best of times even more so if this is combined with a property raid.
What is also worrying for the average taxpayer is that HMRC is increasing the net wider in order to catch more people it suspects of underpaying on their tax and so taxpayers must make sure all their tax affairs are in order.
As HMRC continues to be under pressure to prosecute those taxpayers it believes to have not paid their fair share in tax, it’s likely that it will continue to step up the use aggressive methods such as property raids to reach its targets.
The Revenue also collects information on taxpayers its suspects are underpaying on their tax through the ‘Connect’ database. The system takes information from a variety of private and public sources even from social media to determine individuals or businesses they suspect are underpaying on tax.
If HMRC notices inconsistencies between the information collected by Connect and the taxpayers’ returns this could result in an investigation, but can also lead to innocent taxpayers becoming subject to a HMRC investigation.
With HMRC’s increasing use of aggressive tactics such as property raids more taxpayers are looking to protect themselves against the threat of an investigation.
We provide all our client with access to our Tax investigation Service which can help protect you against the cost of most tax investigations and now provides access to an out of hours helpline for unannounced HMRC visits staffed by one of the country’s leading law firms .
To find out more contact our Head of Tax Disputes and Resolution, Steven Pinhey.