Tax investigations can be time-consuming, stressful and expensive, even when the outcome is ultimately favourable for a taxpayer.

Two recent cases handled by our team at Milsted Langdon illustrate both the complexity of modern HMRC enquiries and the practical value of being properly protected when one arrives.

Our specialists have extensive experience representing businesses and individuals through HMRC investigations and compliance checks of all kinds – from routine correspondence to prolonged multi-year enquiries.

Across both cases below, clients were covered by our Tax Investigation Service, which ensured that professional fees were met up to £100,000.

A four-year corporation tax enquiry and more than £15,000 in protected fees

One client company faced a significant corporation tax enquiry spanning four years, centred on legal fee expenditure totalling over £1 million.

HMRC adopted an aggressive approach to the tax treatment of these costs, and with substantial liabilities potentially at stake, the case ran to more than ten rounds of correspondence before reaching a conclusion.

Our tax investigation team worked through each stage of the process, challenging HMRC’s position at every turn.

While the final settlement did include some additional tax liability, our approach resulted in a material reduction from what HMRC had originally sought, providing a meaningful outcome on a case of this scale and duration.

Thankfully, our client had subscribed to our Tax Investigation Service, so professional fees that would otherwise have exceeded £15,000 were covered in full.

An HMRC ‘One to Many’ letter resolved swiftly, with no disclosure required

A private client received one of HMRC’s ‘One to Many’ letters. This is a form of targeted communication issued where HMRC believes it holds information suggesting undeclared offshore income or gains.

Following a thorough review of the client’s recent tax returns, we responded to HMRC confirming that there was nothing further to disclose. The matter was resolved without further escalation or any additional tax to pay.

In this case, the client’s £65 subscription to our Tax Investigation Service, covered professional costs of £500.

Be prepared before HMRC makes contact

HMRC has significantly increased its use of data-matching, offshore information exchange and risk-profiling tools in recent years.

Enquiries can arrive without warning and affect businesses and individuals with entirely legitimate tax affairs.

Our Tax Investigation Service provides cover for professional fees in the event of an HMRC enquiry or investigation and cover you from initial correspondence through to formal tribunal proceedings, where necessary.

Clients benefit from expert representation at every stage, without the concern of an escalating fee bill on top of an already stressful process.

To find out more about the Tax Investigation Service, please speak to our team to gain peace of mind against a future HMRC enquiry.