Anyone can face a tax investigation. Whether you are a freelancer, a business owner, landlord or a professional filing a self-assessment tax return.
HMRC conducts thousands of investigations each year and even with accurate records and no wrongdoing, you could still be subject to a detailed review.
HMRC narrows the tax gap
In the financial year 2023/24, HMRC generated total tax revenue of £843.4 billion, an increase of £29.4 billion (or 3.6%) from 2022/23, continuing the upward trend of recent years.
Given the recent announcement of 5,000 new compliance staff over the next 5 years, with 200 already in training and 1,800 new staff working in debt recovery, it is clear that there is a renewed focus on the correct tax being paid to the Exchequer and closing the deficit.
Compliance yield jumped from £34 billion in 2022/23 to £41.8 billion in 2023/24. In total, £5.3 billion related to individuals and small businesses, and £9.4 billion from wealthy individuals and mid-sized businesses.
(Source: HM Revenue and Customs – Annual report and accounts 2023 to 2024.)
With HMRC’s ongoing investment in compliance, an increasing number of individuals and businesses are likely to face inquiries. While no one can predict if or when you might be targeted, you can take proactive steps to protect yourself.
Tax Investigation Protection
We are in the process of writing to all our clients to introduce our Tax Investigations Service for the next period of cover (6 April 2025 to 5 April 2026). With prices starting at £55 for individuals or from £170 for businesses, you can have peace of mind knowing that you are covered for the professional costs associated with an HMRC enquiry.
I would be happy to answer any questions you may have. Get in touch in the usual ways.
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.