The tactics being employed by various sectors of HMRC have changed over the last six months or so. Traditionally an enquiry (or “check” as the letters sometimes say) is begun when the HMRC inspector sends the taxpayer a letter saying they are going to be checking a specific tax return and the things that they need. We, as your accountants, usually get a copy of this letter directly from HMRC at the same time. However, at the moment it appears HMRC are not following this formal process and are trying to get business owners and taxpayers to slip up.

We have had a number of cases recently across different types of tax (although most commonly for VAT and PAYE) where an inspector has called our client directly and without any prior warning. These calls have all happened before a formal letter which opens the enquiry has been sent.

In most cases HMRC appear to be playing on the authority (or fear) that the title Tax Inspector generates. Once the inspector has been able to prove that they are who they say they are (and not a scammer) it is natural that faced with an inspector you will want to do what you can to respond to their questions and get them off the phone.

The problem is, they are asking questions that you are not prepared for and as a result you may say things in the wrong way, without reference to data, or in a way that HMRC misinterpret, leading to the inspector wanting to dig deeper into things. As an example, in one case a client answering the question “is it your business?” with “yes” caused a whole chain of issues because this led the inspector to waste a lot of time arguing whether the business was genuinely a limited company or not (because in their eyes a limited company owns the business, not the director).

One of our roles in an HMRC inspection is to act as a chaperone in one-to-one encounters with HMRC. Their current tactics are trying to get round this.

If an HMRC inspector calls, our advice is to postpone the call or direct them to written communication. Here are some tactics you might want to employ:

  1. Express concern about scammers and that you are not happy giving information on an unannounced call (be sceptical, there are a lot of scammers out there posing as HMRC!)
  2. State that they should write to you with all the details they need, and these will be supplied. If a discussion is needed then a meeting can be booked afterwards
  3. Say you are currently on your way to another meeting / away from your desk / don’t have your bookkeeper or accountant available and therefore do not have access to information that may be required. Assure them that you understand their call is very serious and you want to give it your undivided attention and again request they put their questions in writing or set a time for a call later
  4. Inform them that you will have to speak to your accountant before proceeding as you were not aware there was an HMRC check taking place.

Then let us know as soon as possible that enquiries have been made and we can begin our process for dealing with this.

These tactics are concerning as it makes it easier for scammers to pretend to be HMRC. Previously we could honestly say HMRC never call out of the blue asking these questions, but times have now changed. As concerning as a call from an inspector is, it is your right to ensure the caller is legitimately from the organisation they say they are from, that you make sure that call is only taken at a time when it is mutually convenient or that they put things in writing as they are supposed to do.

And if you are covered by our Tax Protection Scheme then getting physical correspondence (even if it’s via email) from an inspector is vital for making sure the costs of the claim are covered.

If an inspector calls, request they put their queries in writing and get in touch with us. We can help respond to concerns and conclude any enquiries quickly, efficiently and cost effectively.

Contact me today!

Josh Curties

BA (Hons) FCA

Partner & Principal Adviser

01474 853856

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