HMRC enquiries can be targeted or random.
The average length of an enquiry is around 17 months.
The average cost in accountancy fees is around £4000.
In a typical investigation where HMRC believe you have acted carelessly, but not wilfully, they can go back up to 6 years.
If HMRC believe you have deliberately submitted inaccurate accounts they can go back as much as 20 years.
Tax owing from past years can increase significantly due to compound interest.
All in all it makes sense to have tax investigation insurance and, like all insurances, you don’t want to use it but it’s nice to know it’s there.
Membership of Your Business Community (YBC) includes tax investigation insurance and this pays your accountancy fees should the dreaded brown envelope arrive.
We expect tax investigations to be on the increase as the government tries to find ways to reduce the huge debt that’s been created by the pandemic.
You can join YBC for as little as £179 per year and enjoy the peace of mind the protection brings.