First client under Investigation!

ademoore Registered Posts: 146 Dedicated contributor πŸ¦‰
Hi everyone

A client just drew the short straw with HMRC and have been told their whole latest SA return is now being investigated! They want literally EVERYTHING sent to them, with an analysis of it, receipts, bank statements, diaries etc.

Since this is my first one being investigated and in so mcuh detail, does any one know of any good literature on what they can and can't ask for etc. My client has nothing to hide in the slightest, and I know I should treat this openly, but still feeling wary of the unknown!



  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor πŸ§™β€β™‚οΈ
    Ade, let me dig out my notes from a CPD course I did and see if any of that helps. Am out of the office now but will look tomorrow - please PM me tomorrow to remind me!!
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor πŸ§™β€β™‚οΈ
    Firstly you do not have to send everything to them. You can tell them that all the paperwork will be available at your client's, or better still, your office. All you need to do is make sure that everything is there for them to look through and that you have set aside enough time for them to look at them, best to offer them a couple of hours of your time. You need to provide access to a photocopier for them to take copies of anything they need, but they have to bring their own paper.
    Also, your client is not required to meet with them, you can do that on their behalf.

    I have done a few of these in the past, nothing lately, but if you would like any more advice, let me know.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor πŸ§™β€β™‚οΈ
    Notes from CPD course (probably not very coherant!)

    Before an investigation happens, brief clients properly - do not talk to HMRC, refer everything to us your accountants
    HMRC are contacting clients not agents - clients MUST keep us in the loop

    Once an enquiry happens:
    Establish Enquiry Type
    Complicance fact sheet (on HMRC website)
    Make sure they stick to what they are supposed to be asking about
    Who is conducting the enquiry?

    Reasonably required:
    -to check clients tax affairs
    Check what they are asking is reasonable!
    Challenge them; don't let them bully you into going to clients premises if it's reasonable to be at accountants office
    Ask yourself "Why is this request reasonably required"
    They do not have blanket universal rights to demand.

    ASK for the formal notice of enuiry from them, not informal enquiries, even if it's slightly complicated.
    HMRC Guidelines - if you reach an impasse "can you tel us why you want all this information and share your risk on these items?" [avoid unnecessary timewasting]

    Meetings with HMRC
    If/ When/ Where / Who/ Agenda/ Brief the client/ Meeting notes

    IF you need a meeting, hold it at the most advantageous place to deal with the enquiry quicker, usually the accoutnant's office

    WHERE - at our offices please

    AGENDA - agree it beforehand with HMRC so we can prepare what HMRC wants

    WHO is coming and what does he want? You want names. If someone turns up you are not expecting as, "who are they and what is their role here today?" Don't be afraid to ask. You CAN say you are not prepared to continue the meeting is someone is there who you aren't happy with.

    Sch 36 gives HMRC no right to meet client or go to the business premises - HMRC can meet the accountant only.

    HMRC HAVE to give you the agenda, and you can ask for more detail if it's wishy washy. "What specifically are you looking for sp we can prepare"

    If in the meeting they go off at a tangent, you can say "we have not prepared this information so lets come back to it another time."

    Tell the client (if present) only to speak when spoken to, and only answer thespecific question (What car do you drive? Correct answer: A 3 Series. Incorrect (too much detail not asked for) answer: a silver BMW 3 Series).

    If they are not issued, ask for the meeting notes (which will be taken by HMRC). Review them to check there are no discrepancies or disagreements. You are under NO OBLIGATION to sign the notes, so DON'T. Simply say "We won't sign them, but have no disagreements with them at this stage."

    Private Bank statements:
    They are PRIVATE! HMRC will want to look but they can only ask if the bank account is involved with the business or if the records of the business are 'broken'.
    Taxpayer is entitled to refuse request for private bank statements.

    If you do produce them, review them first!


    There is more but I don't have time to type it up now

    Hopefully this helps with the first stages :)
  • ademoore
    ademoore Registered Posts: 146 Dedicated contributor πŸ¦‰
    This is all great info, thanks for your input everyone!
    I will start collating and see how it goes!
    Unfortunately my "office" is in my house as I only run MIP part time, lecturing for the remainder, not really someone I would like to have in my home! ;)

    It's a great help, and a point where I can make a start, so thank you!
  • groundy
    groundy Registered Posts: 495 Dedicated contributor πŸ¦‰
    Do not let them meet your client. We never do - this advice was offered to us by a firm called Accountax that offer great CPD courses and is a company run by ex HMRC inspectors. Your client will not gain anything from a meeting but HMRC can gain plenty.

    We always ask HMRC to put all enquiries in writing and then we reply in a timely manner. We also keep presure on them to ensure they stick to time limits as most are under staffed and don't have the time they need.

    I think I remember hearing something about the HMRC having their guidelines available online and within that you should be able to read what is relevant and what isn't it terms of what they can ask for.

    Good Luck !
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