Case Studies: Tax Enquiries

SME retailer who was the subject of a tax enquiry

Our client

A small retailer of take away food operating at markets and events with an annual turnover of £90k.

The situation

A tax enquiry was opened by HMRC as a result of a raid on safety deposit boxes. HMRC alleged incomplete records and missing sales resulting in, circa £1m in alleged additional tax. inTAX dealt with the enquiry and ultimately represented the client at an alternative dispute resolution (ADR) hearing.

The outcome we achieved

Having already persuaded HMRC to reduce the assessment from £1m, the remaining £300k was reduced to a £15k settlement.

Store retail business subject to tax enquiry caused by an issue with electronic point of sale data

Our client

Five-site convenience store retailer, turnover circa £1.5m per annum.

The situation

A tax enquiry uncovered issue with electronic point of sale data. HMRC alleged suppressed sales, with circa £3m of additional income tax, VAT and penalties. InTax challenged the findings and the method of calculation by HMRC.

The outcome we achieved

At ADR, HMRC agreed to reduce the assessments to circa £1m after we demonstrated that its arithmetic did not follow their own arguments. Once HMRC had reworked the calculations and continued to ask for an excessive amount, inTAX put together a cogent argument proving again, that HMRC’s figures did not make sense, since the outcome was beyond the realms of realism when further factors were taken into account. The case is on hold with the Tribunal whilst we continue to negotiate with HMRC.

Industrial services provider who, subsequent to a disclosure, was the subject of a tax enquiry

Our client

Industrial services provider. £60m turnover

The situation

A tax enquiry was started by HMRC across all heads of tax, subsequent to a disclosure that was made using the Liechtenstein Disclosure Facility (“LDF”). During the enquiry HMRC suggested there was an indication of money laundering, that CIS had been incorrectly dealt with to the tune of c£2m, and without foundation that the LDF had not been a full disclosure of past issues. inTAX argued that the CIS was correct by reconciling across multiple suppliers and customers. inTAX also argued that the LDF was complete and had fully disclosed all past errors.

The outcome we achieved

HMRC agreed that the CIS was in fact correct after a full reconciliation and argument was provided by inTAX. HMRC also finally agreed that the LDF was a full and final disclosure of historical errors. HMRC apologised for its behaviour, made a repayment to the clients and footed some of the costs.