How Far Back can HMRC go?

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Can HMRC investigate closed companies?

Yes! HMRC do have the power to reopen previously settled tax returns if an investigation reveals serious questions.

However I have not seen this happen regularly and they have other ways to attack  a  director personally these days rather than go for a closed company

Normally the HMRC tax investigation time limit is 4 years, in which they can go back to re-claim back tax .

If someone has been proved to be careless (submitting tax returns with mistakes), ...

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HMRC Investigation – Guilty until proved innocent

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Why you must take the urgent advice of a specialist if you receive a letter from the Taxman!

Even to innocent taxpayers, an enquiry letter from HMRC causes feelings of fear and the clients always tell me they cannot sleep for the worry and feeling they have been found guilty before being allowed to prove themselves innocent.

People firmly believe they must hand over everything to HMRC just because they have requested it.

In fact I have trouble sometimes convincing a client that ...

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Who will HMRC target? and why?

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Well, there are many reasons for them scrutinising your tax returns and here are some in a nutshell!

Informants

HMRC will never reveal their sources but it is largely accepted that a tip-off about possible tax evasion or errors made can be a major trigger for an investigation.

The most common informants are:

  • Disgruntled employees or ex-partners who know of tax-evasion activities
  • The existence of a cash-only policy at your business
  • Living a lifestyle beyond your supposed means

 

Regular mistakes on returns

However, if you regularly make ...

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Furlough Fraud Investigation – HMRC Anonymous fraud hotline

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HMRC is said to be investigating almost 8,000 reports of furlough fraud received via its anonymous fraud hotline, but this could just be the tip of the iceberg.

A recent survey revealed that around two thirds of respondents continued to work for their employer after being placed on furlough, which is against the rules of the scheme.

If the survey is representative of all CJRS claimants, it could mean millions of claims have been made fraudulently.

HMRC is encouraging those who have taken ...

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