Facing a tax investigation by HMRC can be stressful for anyone paying taxes in the UK. It does not matter whether you're an individual filing a self-assessment tax return or a business owner dealing with corporate taxation; the thought of an HMRC inquiry can be overwhelming.

However, you need to understand that you have rights and responsibilities throughout the process. By doing so, you can navigate the investigation with greater confidence and clarity. It is important to remember that the information you need to know is straightforward and easily accessible.

This article covers tax investigations in the UK, including your rights and responsibilities. We'll also discuss the role of tax accountants and consultants in helping you achieve a favourable outcome.

If you're worried about a tax investigation, it's important to know what can cause one. HMRC might investigate you randomly if they think there's something wrong with your tax returns or if someone reports suspicious activity. If you have money or property in another country, you need to declare it properly, or this could make HMRC suspicious, too. If they suspect you're deliberately avoiding paying tax or committing fraud, they might carry out a more serious Code of Practice 9 (COP9) investigation.

As a taxpayer, you have the right to get professional help. You can choose to hire a personal tax accountant, tax consultant, or another qualified professional to speak to HMRC for you and guide you through the investigation process. This can be particularly helpful if you're facing a more complex or serious investigation, like a COP9 inquiry. Tax professionals have the experience and knowledge to help you protect your interests and navigate the process.

Another important right is the right to confidentiality. HMRC has a duty to maintain the confidentiality of your tax affairs and cannot disclose information about your investigation to third parties without your consent or a legal requirement to do so. This means that you can discuss your case openly and honestly with your tax professional without fear of your information being shared inappropriately.

As a taxpayer under investigation, you have the right to a fair and impartial inquiry. HMRC must follow the law and its guidelines when conducting inquiries. If you feel that any aspect of the investigation is unfair or unreasonable, you can challenge it. If you disagree with the outcome of the investigation, you can request a review of HMRC's decisions or appeal to an independent tribunal.

You also have a responsibility to cooperate fully with HMRC's inquiries. This means providing all relevant information and documentation in a timely manner, attending interviews or meetings as requested, and being truthful in your communications with HMRC and your tax professional. If you fail to cooperate, there can be penalties, increased scrutiny, and even criminal charges in serious cases.

You also have a responsibility to keep accurate records and disclose all relevant information about your tax affairs. If you have foreign income or assets, for example, you must ensure that you've properly disclosed these on your self-assessment tax return and paid any applicable UK tax on foreign income.

If you've previously failed to disclose foreign income or assets, you can use the Worldwide Disclosure Facility (WDF) to bring your tax affairs up to date and minimize penalties.

If HMRC is investigating you, you can get help from a personal tax accountant or tax consultant. They can help you understand the process, talk to HMRC for you, and give you advice on how to resolve the investigation. They can also gather information and documentation, negotiate with HMRC, and represent you in appeals or tribunal hearings if necessary.

It's important to choose a tax professional who has experience with HMRC investigations and knows tax laws and procedures well. They should be able to give you practical advice based on your situation and help you devise a plan to resolve the investigation efficiently and in your best interests.

You can also take steps to reduce the risk of an investigation. Keep accurate records, submit tax returns on time, and disclose all relevant information about your income and assets. If you need help with what to do, talk to a qualified professional instead of guessing.

Dealing with an investigation can be tough but understanding your rights and responsibilities can help. With the support of a tax professional and by working with HMRC, you can aim for a good outcome and minimize the impact of the investigation on your finances and well-being. Remember, you don't have to face this alone.