All enquiries begin with an open dialogue. This usually takes the form of a letter that states what type of HMRC enquiry there is and why the enquiry is taking place. The letter may or may not list a time, date, and place for an initial meeting. If no meeting time is specified, you will receive a phone call to schedule the meeting and outline a time frame for the enquiry, including initial meeting, production of documents, examination of documents, and a discussion of findings. With a full enquiry, you should definitely cash in on any Tax Enquiry Insurance you have, and seek tax advice from professionals. It is always best to go into a full enquiry meeting with an agent!
The initial meeting will basically cover why the enquiry was opened, and give you the opportunity to make any declarations or statements. The nature of the business will be discussed, as well as what records are kept for the business. The meeting will result in a list of documentation that must be handed over to the inspectors. After the tax inspection, a second meeting will take place where you are notified of the results of the investigation. At this point you will learn what mistakes they want to claim were made, and what penalties will be charged, as well as additional taxes that may be owed. In most cases at least one or more tax disputes will be found, but if you have an agent to protect your rights you will likely be able to get out of the enquiry unscathed, unless you truly made an error.