The Revenue may also demand a meeting with the taxpayer. It is important to note that they have no legal right, at the date of this article, to demand such an interview. Specialist advice should always be sought as to whether or not one should attend a meeting, and again many an unfortunate taxpayer, who has done nothing wrong, ends up with a tax demand based on some innocuous remark, or a guess, made during an interview. No taxpayer should ever feel they are obliged to attend interview, and certainly no taxpayer, who decides to attend, should be unaccompanied by a representative with some experience of handling enquiries by the Revenue.

The Revenue will usually bring a tax enquiry to an end by the issue of a notice of closure issued under S28(1) TMA 1970. In this notice the Revenue must state its conclusions, either that no amendments to the return are required, or alternatively, if he/she considers amendments are required, exactly what these are. The taxpayer may then either accept and amend the return, or refuse. A refusal will result in a determination of additional tax due, which can be appealed by the taxpayer. Again, specialist advice needs to be taken at this stage, as the onus will be on the taxpayer to prove the tax is not due and get the determination set aside.

Interest and penalties will be calculated at this stage on any additional tax due.

Often a full tax enquiry will drag on for many months or even a year or two. The taxpayer has the legal right to apply to the General Commissioners to have the enquiry shut down if it is appearing to be getting nowhere. This decision should not be taken lightly, and again, specialist advice may well need to be taken.

The above comments pertain to a normal local tax office enquiry. Of course, in cases of serious suspected tax fraud, it will not be your local taxman dealing with the case. There are slightly different procedures for serious cases of tax evasion, and it will be the Special Civil Investigations Office who deal with these, under something called ‘Code of Practice 9’ (COP9). In every type of this case, specialist advice should be sought at the earliest opportunity.