Enter Your E-mail

Freelance journalist Nick Morgan, author of 'Tax Investigation For Dummies' considers whether taxpayers subjected to an HMRC enquiry should apply to the Tax Tribunal for closure. 

Can I Force the Investigation to End?

If you feel that an invasive investigation has gone on for a long time - particularly without any discovery - you can apply to the Tax Tribunal to make HM Revenue & Customs (HMRC) close the case (HMRC Staff Appeals Handbook: AH2125 - Appeals Handbook - SA Appeals: Assessments, Amendments and Enquiries: Application for a Closure Notice: Application to Commissioners).

The investigating officer will have to justify keeping the case open and then the likelihood is that the Tax Tribunal will give a deadline for the case to end.

Schools of Thought

There are two broad schools of thought on this: firstly forcing an investigator to close a case prematurely may result in higher assessments as you have less time to establish your innocence. The second school of thought - and the correct one in my opinion - is that the longer the case is open the more HMRC fishing will take place and the greater the pressure on the investigator to bring in a catch, so it’s best to close ASAP.

After closure notices (see EM1975 - Working the Enquiry: Closure Applications: Contents for details on the procedure) are issued you will have 30 days to appeal. If you accept the HMRC figures they will become binding to all parties, if you appeal HMRC can revise the ‘final’ figures to be presented before a Tax Tribunal.

A Long Process

In my case the closure notices were for just over £6k, when I appealed HMRC doubled that figure to an eye-watering £12k then - after a year of negotiation and a month before the Commissioners' Hearing (the Commissioners have now been replaced by the Tax Tribunals) was due to take place HMRC reduced their figure to just over £4k. The whole case took just under four years.

[ See more of Nick Morgan's Tax Investigation ordeal in a previous article - Everything you Wanted to Know About a Tax Investigation - Should I Go to a Meeting? - Ed.]
 
The above is an extract from 'Notes From Hell - Tax Investigation for Dummies' by Nick Morgan, a freelance journalist who was the subject of an HMRC enquiry into his self-assessment return. The book can be ordered from TaxationWeb's sister website, TaxBookshop.com

About The Author

At the start of 2005 Nick Morgan was working as a self-employed freelance journalist. HMRC opened an investigation into his tax return.

Nick attended an interview (unrepresented) and was both open and truthful. He also supplied all the documents asked for.

An investigation like this which is small and where there is full cooperation shouldn’t have lasted more than 12 months. But this went on for five years.

The investigators were bullish and petty with HMRC showing neither proportionality nor regard to the cost (to the taxpayer) of running such a small investigation for so long.

Nick used his journalistic skills to expose HMRC; he recorded telephone calls and interviews and carried out Freedom of Information and Data Protection searches. These investigations broke new ground and exposed the investigators as incompetent and vindictive. All this information was uploaded on a website for anybody to see.

It soon became apparent that what was happening to Nick was typical of what was happening up and down the country.

Nick further exposed HMRC’s underhand practices in a Sunday Times spread and other national papers.

Since then HMRC has put pressure on its investigators to be more proportionate and to be more mindful of expense.

To help others Nick built tax-hell.co.uk where he’s written broadly about tax investigation, tax law and the tactics of HMRC.

The website has helped 100s of 1000s. Some leave comments about how Tax-Hell.co.uk has helped them. Many say, “I don’t know what I’d have done without you.”

He’s written three ebooks which translate HMRC-speak into clear English and he also offers free tax advice (from a fully qualified advisor) to anybody who needs it.