HMRC Investigation - The Book-keepers Forum (UK)

confused74 · Veteran Member

HMRC Investigation

Shamus · Forum Moderator & Expert

Hi Cheryl,

Sorry to hear about your current problem espechially as you actually took the kings shilling and went permie with one of the clients.

If your expenses were legitimate and can be shown to be (kept mileage logs, software licences for the business, business related insurances etc.) then HMRC have no grounds to pursue this matter regardless as to your level of revenue. The critical part of the equation is that you incurred the expenses in legitimately attempting to run a business regardless as to the success of the enterprise. For that one it might be a good idea to get you accountant involved in dealing with them rather than ontinue down that path yourself.

On the giving details to HMRC of other clients, the new bookkeeper doesn't come into the equation beyond professional courtesy. You do however have a duty of confidentiality to your clients (whether current or not) per the IFAC code of ethics section 140 and as such, on the back of the HMRC requirement to disclose client information you need to speak with the legal department of your supervisory body.

Kind regards and good luck with the impending birth,

all the best,

Shaun.

YLB-HO · Guru

Oh dear poor you. I am sorry to hear the HMRC are being a real pain. And although I agree with Shamus about the confidentiality to your clients, you seem to have another issue.

If the HMRC are asking for client addresses I presume this mean you never issued an invoice which has these details on it? As if you did, they would not have to ask and I would presume that would have been the end of the matter.

I often tell clients if you have an invoice for work, even if it was free - the invoice is proof that you did the work and any expenses you incur are legitimate even if it meant you lost money doing it.

confused74 · Veteran Member

Hi there, thanks for the replies.

The expenses that I have claimed for are legitimate, they are questioning my mileage but most of my clients were 180 miles away in the town where I used to live so I used to commute down to pick up the stuff and then go back once the books had been completed. I claimed 3 times during that period for hotel but only claimed 75 % as one time I also incorporated a funeral into the visit. The funeral was of an ex client but they say as the visit wasnt purely for the benefit of clients I cant claimt it....

When invoicing my clients for book-keeping I only ever put their name as I always always delivered the items back and obtained payment at the time.

My quandry in them approaching the new book-keeper or even any of my old clients is that the new book-keeper is also my mum. I just feel as if they are picking on me, at the interview they started of really nice asking about the pregnancy etc and how I was coping and things like that, then all of a sudden they went into work mode and I felt kind of harrassed and stuck in a corner with two people asking questions trying to trip me up.

I even have to supply them a copy of my daughters bank statement, she is 12 ! as I transfer her pocket money into it on a monthly basis so that she doesnt waste it on magazines and sweets.

I just dont know where to turn at the moment.

confused74 · Veteran Member

Forgot to mention that they are also questioning the fact that my mum gave me £1500, I explained that my grandma had died and my mum had received some monies from the will, my mum, dad and my brothers were all supposed to go on a family holiday but I had a fall out with my brother over something that happened years ago and so the holiday was cancelled, so she gave me £1500 which was my share if you know what I mean..... The lady at the revenue questioned this by saying that the argument was over something years ago so why drag it up now. She belittled the fact that I had a traumatic childhood and had only just had the courage to speak out about it. She had me in tears over it. This cant be normal ?? can it ?

Shamus · Forum Moderator & Expert

Hi Cheryl,

Unfortunately it is quite normal. Coming accross sympathetically and then going for the jugular is normal practice as if at your ease you are more likely to be forthcoming of information that they are not allowed to or have not thought to ask.

From what you have written I am relatively certain that the issue here is that HMRC believe that the £1500 is undeclared income.

Think about things through their eyes. Your mother takes over your clients and passes you £1500. How does that look to you?

Whilst the inspector may have some personal sympathy for your situation it is not within their remit to allow such to come into the investigation. At the end of the day this is business and personal situations are only incidental to that.

If you have an accountant it might be a good idea to involve them now, if you don't then give the help desk of youir supervisor body a call. If you have retired your membership due to the impending enlargement of your family I would suggest that you engage a good accountant to deal with HMRC on your behalf as they will know what is valid and relevant and HMRC will not be able to twist them up in knots as they seem to be doing with yourself at the moment.

The downside is that I can see a fair chunk of the £1500 disappearing in accountants fee's in order to get this matter resolved.

confused74 · Veteran Member

Its already spent lol... When my mum transferred it over it clearly shows holiday on her bank statements, I understand people lie all the time, but Ive tried to be as open and honest with them as I can be. I cant afford any help as Ive had to start from scratch for this pregnancy as my youngest is nearly 10 and we had nothing.... shes given me more money since, she bought the cots... are they going to question that too. I even had to prove I was pregnant ! can you believe it.

confused74 · Veteran Member

She had also transferred other sums throughout the year, silly amounts for birthdays and christmas's. She used to send cash but some went missing in the post so she thought it easy to do through the bank.

attilabenko · Guru

Hi Cheryl,

First of all stop worrying, it is not going to help in any ways apart from you are going to feel worse. Did you not have a business bank a/c? I believe to have one is very important so you can separate your personal finances from business finances. Well anyway if you have done every reasonable step to provide them with information and the info was correct and the numbers seem to be realistic than you should be ok. They will try to find something, that's their job. If they would not find anything it would prove they made a mistake so they would be questionned by their manager why they wasted their time. So they have to find something what can be at least a tiny bit suspicious and than find proof that it is or it is not. That is their job. If they cannot prove anything they can't really take it any further and if they do than you will have to,too (well if you are confident everything you said is true or it is true to your best knowledge).
The problem is the more they get into it the more they need to find something to show they are not wasting their working hours...
About client's addresses as it had been said before just tell them you are more than happy to provide them but first you have to seek legal advice as you are not confident with the legislation regarding this matter. They can NOT advise you, they are tax professionals, they might had been trained on data protection,etc but they cannot say for sure(they are not allowed).
Do not panic, that's the main thing. HMRC investigators are just doing their job, it is just a bit unfortunate it involves you and they are wasting your time.

Shamus · Forum Moderator & Expert

Hi Cheryl,

Sounds as though they may be scratching around for something to justify the time and expense of the investigation.

in the absence of a accountant or the help of a supervisory body have a read of this link that also has contact details for the compaints process. (you may have been given a leaflet with this information at your meeting).

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&id=HMCE_PROD1_029193&propertyType=document

And also this helpsheet that also has contact details for Citizens advice who may be your best option in the absence of other sources of assistance.

http://www.hmrc.gov.uk/factsheets/complaints-factsheet.pdf

all the best,

Shaun.

confused74 · Veteran Member

Hi Attila, To save money in the early days I used my own personal bank account as none of the banks would offer a free business bank account. I have no other money going into the account apart from that declared to the HMRC, they all match my invoices, I have tax credits paid in to but thats clearly itemised. The lady in question could not relate to my predicament at all, she has no children and just kept on and on and on at me, I had to beg for a cup of water ! they wouldnt let me use the loo, anyone knows a pregnant lady wees more than normal. I just feel really hard done by and feel that its never going to end !

confused74 · Veteran Member

Thank you Shaun.

attilabenko · Guru

Don't worry! If that's how you feel about their procedures you really should seek legal advice. Also you should complaint about the above, Shaun got the link. I know it is difficult and they do put a lot of pressure on you. Everybody deals with these type of situation differently, I would have walked out of the meeting. The problem with all the legal route and complaints is it will cause you further distress and you relly don't need any more...
I only can tell you what I would do and this is NOT an advice. If you gave them everything you had and answered all their questions than just let them get to a decision- it is not necessarily will be negative, they might just say everything is ok. Once they done and there is a problem, than take it further. Before their decision I don't think there is a lot you can do.
Again it is not an advice that's just what I would do and I have never been investigated.
If they don't let you use the loo just ask them if there are any criminal charges against you or what.
It is going to end, don't worry. Once their cost exceed the amount they possibly could recover they will have to end the investigation...

confused74 · Veteran Member

Thank you for all the advice given, If I complain will they look at me more harshly ? strange question I know. I dont want to be penalised or investigated more because I have put a complaint in?

attilabenko · Guru

Also just remembered reading HMRC's manual about investigations to own a boat (anything bigger than a rowing boat) is a sin! So make sure there are no yachts on your name! ;)

attilabenko · Guru

I think by the time they deal with your complaint your investigation will be over knowing them..

confused74 · Veteran Member

I wish I had a boat ... would sail away and do a John Darwin lol.
Thanks everyone for your help you have helped put my mind at ease slightly, always best when you know you arent on your own and there are people to help, Wish I had found the forum before my interview.
My bank account was permantly overdrawn for the period, you would think that if I was doing a naughty, I would of done a much better job at it !!

Shamus · Forum Moderator & Expert

Hi Attila,

"don't worry. Once their cost exceed the amount they possibly could recover they will have to end the investigation..."

I think that looking at the figures given, even with interest, penalties and surcharges they probably breached that on the initial investigations during and after the first meeting!

I can't guarantee it but my money is on that this will drag on for a while and then just go away.

The issue as I see it was the £1500 coming from the new bookkeeper as that really looks like undeclared income either from ex clients or as a payment for a bookkeepers stable of clients.

HMRC do not currently seem to be giving any credibility to the fact that this is just a mother helping her daughter out.

I suppose, (defending HMRC) you see people trying to pull the wool so often that when someone is honest you still suspect the worst and just believe that you have not been able to find where the dishonesty is yet... Then again, that's the remit isn't it.

Not letting someone have a drink or go to the toilet when they are seven months pregnant is to my mind though seriously out of order even if this was a criminal investigation.

confused74 · Veteran Member

But they didnt even know about the £1500 until they asked for the bank statements covering the period I was not self employed. She didnt pay me for the client list as they were her clients in the first place that she passed onto me to get me started.
My boss is a commandant in the police force and he says even the criminals are allowed a drink and to go the toilet whether or not they have been charged. Apparantly they have no facilities for members of the public but surely asking members of the public in for interview must make them have to make toilets available ? Anyway, I digress, thanks again for the help and advice, If you lovely people think of anything else that may help me Id love to hear from you.

Thanks again.

Shamus · Forum Moderator & Expert

lol Cheryl,

lucky they didn't ask about the £100k in the suitcase under the bed then!

Also, yes, although we sometimes argue a bit on here about technical points we're quite a close and protective little community who do try to support and look after our own as much as possible.

I suppose that it's due to the fact that most of us work alone for a fair chunk of the time and it's nice to know that you are part of a larger supportive group of like minded people.

Sets this site appart a little from some of the others where you daren't ask a question for fear of the longstanding members setting on you like reservoir dogs.

Can't say that there hasn't been a couple of cases of that on here or that I'm completely innocent on that front but such is very much the exception rather than the rule on here.

Are you going to be going back to bookkeeping in the future or are you going to be drawing a line under it?

If you do come back it might be a good idea to go for ICB membership as in the absence of an accountant their legal department would have helped you out in cases like the one that your having at the moment.

Right, I'm supposed to be studying forward contracts, options, swap's and futures (which is why I'm finding any excuse to spend my time on here at the moment!).

talk later,

Shaun.

confused74 · Veteran Member

Hi Shaun,

I am unsure as to what the future holds for me, I thought the book-keeping route was the way to go but after all this I dont think so. I have done my AAT int and was 3 months into the technician when I found out I was expecting so I stopped doing that as I couldnt afford the upkeep for that as well as buy things for the baby, they sometimes say that things happen for a reason .... Im really hope so !!!

This investigation has really put me off but then I also enjoy getting into the nitty gritty of the book-keeping and make sense of little bits of paper. I have been doing it since I was about 14 as I used to help my mum out for pocket money, I have always been involved in accounts one way or another whether its working on the ledgers or credit control.

You are a star and have been fantastic ... you can come again lol xxx

confused74 · Veteran Member

Also, forgot to mention... they are asking me to ask me mum for her bank statements showing the payments to me. Are they allowed this information ?

-- Edited by confused74 on Wednesday 11th of May 2011 12:29:28 PM

Peasie · Expert

confused74 wrote:
Hi Attila, To save money in the early days I used my own personal bank account as none of the banks would offer a free business bank account. I have no other money going into the account apart from that declared to the HMRC, they all match my invoices,

I'm exactly the same. I opened my personal bank account in 1987. I seriously doubt I'd get a business account these days. There is just not enough money involved at the moment. Do banks have a minimum amount they will not give a business bank account to if you are earning less than that. When I have passed all my exams I will be setting up a bookkeeping practise properly and then when I reach a reasonable level of income I will open a business account. I've even got one client paying by standing order in the hope the bank will say you are operating a business, you need to open a business account, kind of forcing them into opening a business account.

I'm actually in quite a similar situation as Cheryl in that my mother has made a few gifts to family members over the past few years, including a couple of £1000 gifts. I suppose if I was investigated I could show these on HER bank statements if things got extreme.

Regarding the use of a personal account and I know as a bookkeeper how much I would hate it if I had a client that did, but is it really so much of a problem as regards HMRC. Are they interested in the money coming out of an account? I can't see how they would be. So really, all I should be bothered about is the money being paid in and as long as I can match this up to transfers from my ISA or invoices being paid.

Hope I haven't hijacked this thread but it is kind of similar.

EDIT : I must have been composing that for about an hour given the amount of replies that have appeared since I started. Think I'll need to read through them first.

-- Edited by Peasie on Wednesday 11th of May 2011 12:13:22 PM

Shamus · Forum Moderator & Expert

Hi Peasie,

banks think longer term than immediate cashflows and they love accountants as accountants are basically their unpaid representatives to new businesses.

You won't have any major problem setting up a basic business account espechially with your normal bank who will have history on you.

It is doubtful that you would have any overdraft facility at startup unless you can show that you could easily repay such if required.

When you start the business I would strongly advise opening the business bank account just so that everything is kept totally seperate.

I think that it's Barclays at the moment that are giving away quickbooks as a freebie to new business customers but you would need to check that.

confused74 · Veteran Member

confused74 wrote:
Also, forgot to mention... they are asking me to ask me mum for her bank statements showing the payments to me. Are they allowed this information ?

-- Edited by confused74 on Wednesday 11th of May 2011 12:29:28 PM

Peasie · Expert

Shamus wrote:
Hi Peasie,

banks think longer term than immediate cashflows and they love accountants as accountants are basically their unpaid representatives to new businesses.

You won't have any major problem setting up a basic business account espechially with your normal bank who will have history on you.

That's the worry. They will see my credit card history. Although to be fair it is improving. I got into personal difficulties a few years ago and I also ran up a hefty bill paying for driving lessons etc. Then when I got a car nobody told me I'd have to fill it up with petrol every few weeks for it to keep running. The problems I had then served as a wake up call and at 44 decided what I wanted to do in life. Most people have an idea when still at school. Now I see it as the best thing that happened to me.

I do keep things seperate and I know having a business account would make life a hell of a lot easier. But trust me I have a record of everything. I analyse spending down to the last penny. I've mentioned before how I know I've spent £51.04 on milk this year (114.816 litres). I even know how many toilet rolls I have bought. TMI.

Peasie · Expert

confused74 wrote:
Also, forgot to mention... they are asking me to ask me mum for her bank statements showing the payments to me. Are they allowed this information ?

I doubt whether they are allowed to but I know if they asked me in similar circumstances I would just obtain a copy for them. I check my mum's bank statement for her every month anyway and I can't see my mum objecting especially if it would make things easier for me.

confused74 · Veteran Member

I doubt my mum would also object but I know she is not amused as to how they have treated me, she has been in the business since the late 80's and has never had a problem, I kind of feel Im dragging her into my mess if you know what I mean. What is the likelihood of them turning around and inspecting her because she's my mum and they have little on me ?? They need to justify all this some how.

Shamus · Forum Moderator & Expert

Hi Cheryl,

Officially no as the bank statement relates to a third party so they would need officially to contact them directly. However, it's just cutting a step out as they are quite within their rights to go directly to your mother to ask for the required information.

To my mind if such is available to you then it might be easier to just give them a copy (assuming that they will accept a copy) of your mothers bank statement showing the transfer.

confused74 · Veteran Member

Thanks Shaun xx my knight in shining armour. Will supply them with my mums statements and my daughters pocket money statements and see what else they think of.

BudgetB · Guru

I can't image what further information your mums bank statements could provide that yours don't. They're only going to show the same transfers. I'd probably say no, but then I'm like that.

On the bank account front, I have always advised clients to have separate business and personal accounts as if they are subject to an investigation they can provide the business bank statements as evidence to backup their other accounting paperwork, and unless HMRC had a very good reason then they would have no need to see personal statements. Interestingly money received as inheritance is one of the examples I use in that spiel.

I was taught to question everything they ask for as they have to have a justifiable reason for seeing it, often they hope you will provide additional information in the hope you trip yourself up or reveal something.

Shamus · Forum Moderator & Expert

Hi Peasie,

don't worry too much about your personal credit card history unless you went into a voluntary arrangement or have used bankruptcy as a way out of debt.

If your setting up as a financial professional the bank will be more than willing to kiss and make up... And if they don't there are plenty that will.

As mentioned previously it is doubtful that they would start you off with any overdraft facility so they really have nothing to lose by the arrangement.

confused74 · Veteran Member

In the beginning I supplied everything and questioned nothing, then since the interview and they were horrid I have begun to think WHY !! My personal statements show everything, from monies received from clients, most of which was paid by s/o or bank transfer, everything purchased for business use I paid for with debit card. I even got rewards from my account for paying in over £1000 a month and have even declared that ! Sometimes it just feels like Im going round in circles, I cant wait to received their interview notes, wonder how one sided they will be .... I had to ask for a copy, they didnt volunteer a copy !

Shamus · Forum Moderator & Expert

Hi Jenny,

to quote "often they hope you will provide additional information in the hope you trip yourself up or reveal something".

I think that's what HMRC were going for with Cheryl when they started out very freindly in their approach before turning nasty.

I tend to agree on the approach of them needing to justify why they want to see things but in Cheryl's case I think that we also need to factor in that she just doesn't need the hassle at the moment. This should be a calm and relatively stress free time for her but insead she's going through possibly the second worst thing next to moving house.

confused74 · Veteran Member

I actually quite enjoyed moving house lol.....

I just thank god that I have come across this forum and now have all this help and advice.

Peasie · Expert

Shamus wrote:
Hi Peasie,

don't worry too much about your personal credit card history unless you went into a voluntary arrangement or have used bankruptcy as a way out of debt.

If your setting up as a financial professional the bank will be more than willing to kiss and make up... And if they don't there are plenty that will.

As mentioned previously it is doubtful that they would start you off with any overdraft facility so they really have nothing to lose by the arrangement.

I have an overdraft on my personal account - and I go to within £5 of its limit every month. I know when money is coming into my account and going out so look at my spreadsheet with spending/income for the next two months. I then pay off the maximum I can afford on my credit card at the start of the month to leave me within that £5 margin at the end.

Now that I've passed my payroll exam I will rename my business "Joe Bloggs Bookkeeping and Payroll Services" rather than just my name and nothing else.

Wella · Expert

Hi Cheryl

Your situation is the one thing that I am dread, either personally, or on behalf of a client.

This link may be useful. It is the HMRC procedures that you as a taxpayer can expect during an investigation (non criminal)

http://www.hmrc.gov.uk/pdfs/cop8.htm

Ironically it is titled COP8.

One thing I did spot is that the information you are required to supply to them may be third party records.

A quote from the document

"We will always be courteous, fair and professional and will only ask for the information we believe to be reasonably required for our investigation. "

I think we all wish you a speedy resolve to your situation

Bill

Wella · Expert

Shamus wrote:
.....I tend to agree on the approach of them needing to justify why they want to see things ...

From what I have just read, they are not required to justify their reasons.

They do have to give a reason why the investigation has not been concluded but only if asked.

Another quote

You have the right to ask us why we are continuing with our investigation if, for example, you believe that you have provided all the relevant information and explanations and we have had adequate time to investigate the position and bring matters to a close. If we are unable at that time to conclude the investigation, we will explain the reasons why. For example, we may feel it necessary to seek further information by approaching other persons or organisations.

confused74 · Veteran Member

Thanks Bill, its such a relief to have a forum like this where I can obtain help and advice, I might even actually get some sleep tonight !

I did think that maybe she was digging a little harder to find something as there is nothing that actually stood out to her, might be just me.

I know that some people do cheat the system but I have always tried to be as honest as I possibly can in everything I do, if I find money in the street I hand it in ! silly things like that, they treat everyone as if they are guilty, without thinking about how the enquiry is actually going to affect that person.

I know its just a job for them and maybe I have to much compassion and empathy which is why I would never get a job at the HMRC !

Thanks everyone x

BudgetB · Guru

Shamus wrote:
Hi Jenny,

to quote "often they hope you will provide additional information in the hope you trip yourself up or reveal something".

I think that's what HMRC were going for with Cheryl when they started out very freindly in their approach before turning nasty.

I tend to agree on the approach of them needing to justify why they want to see things but in Cheryl's case I think that we also need to factor in that she just doesn't need the hassle at the moment. This should be a calm and relatively stress free time for her but insead she's going through possibly the second worst thing next to moving house.

I totally agree, she doesn't need this and it sounds like they are being very heavy handed. I had a guy who was caught out owning 9 rental houses some years ago now and they weren't this harsh.

My comment was more in relation to Peasies thoughts on separate bank accounts etc and the general discussion of investigations, rather than specific to Cheryls situation.

I think your advice of getting an accountant involved could be useful as sometimes they will back off when there is buffer between them and the tax payer, but again I appreciate that this costs money when she has a load of expenses already. Difficult situation all round.

confused74 · Veteran Member

Thanks for the support, means a lot xx

gbm · Guru

Hi Cheryl,

Re requesting copies of your mum's bank statements, yes they can ask and if you've got nothing to hide, it makes sense to provide them. If you start getting defensive and saying no, they start thinking that you're lying. I'm not saying you are, I'm just suggesting that cooperation shows that you want to get things sorted out.

Luckily, we haven't had a full investigation in 7 years, only a couple of aspect ones, and the most frustrating part is where HMRC ask for something and you ask your client and they don't reply, which makes HMRC think that you're being awkward. I'm not advocating rolling over and letting them tickle your belly, just providing the info in a prompt manner to show you're willing to play ball.

That said, it does sound like you've had a rough ride. Good luck.

Shamus · Forum Moderator & Expert

Hi Nick, Bill,

nope, I'm not seeing it. (sense the disagreement coming here).

If X buy something from Y or Y provides a service for X, X has no right to ask Y for their bank statements to pass to HMRC. Only HMRC can ask for such from Y.

Think that you're misreading the HMRC document in this instance. They have the right to request information from you, and third parties but they have no right to ask you to supply the information from third parties.

As Nick says it makes for an easier life to comply and pass the third party details if you have access to them and have specific authority from the third party to do so.

ADAS · Guru

Intuitively I'd agree with BB and Shaun. Following the revenue's logic - a customer pays the OP for services, does that mean the revenue can ask for her clients bank statements?Seems flawed to me.

Edit: Does the fact that someone enters into a transaction with you, give the Revenue the right to request the other parties information?

I'm also amazed that you where refused a request to go the toilet. Personally I'd have told them I was going whether they liked it or not and if they attempted to stop me I'd sue them personally for false arrest.

As for belittling (sp?) a family argument , again it's none of their business and you're well within your rights to point it out to them. Fair enough it's not a good idea to be obstructive but equally you have the absolute right not to be intimidated or bullied.

-- Edited by ADAS on Wednesday 11th of May 2011 04:37:47 PM

-- Edited by ADAS on Wednesday 11th of May 2011 04:42:59 PM

Wella · Expert

Hi Shaun

Nope, no disagreement, having a bad writing day.

I meant that they can ask for the records from a third party, and have an expectation that you will comply with necessary permission to divulge the info.

Denying someone the use of a toilet to obtain information is more akin to Guantanamo Bay.

Shamus · Forum Moderator & Expert

But at least with Guantanamo Bay Cheryl would have got a nice orange jumpsuit. biggrin

BudgetB · Guru

Shamus wrote:
But at least with Guantanamo Bay Cheryl would have got a nice orange jumpsuit.

Not sure if they do a maternity range.....!

confused74 · Veteran Member

I dont like orange, much prefer pink... thanks for all the advice xx I have the bank statements from my mum and will send them in once Ive received her letter and my copy of the notes, I want to go through them thoroughly first and make sure that my points have been made fairly and that its not just all one sided.

I had a good nights sleep last night, for the first time in ages, thanks guys xx

attilabenko · Guru

Hi,

Regarding to if they are allowed to ask for third party documents, yes their guideline is to make an informal request first because that can speed up their work/investigation and if they cannot get the documents with an informal request they can do a formal/official request.
Other guidelines are ' You must not take the attitude that because a taxpayer has committed an offence, or may have done so, they can be treated differently from other members of the public.'
'Just because there is an enquiry, the taxpayer must not be treated in any way differently from other taxpayers, even if omissions have been discovered or admitted. HMRC's publication called "Your Charter" explains taxpayers general rights and obligations.

Inevitably it is more difficult to maintain good communication with a taxpayer throughout an enquiry. They may find some lines of questioning intrusive, resent the additional costs of the enquiry, deliberately delay matters to hold up settlement, cloud the facts to hide evidence of evasion and try to provoke you into losing your temper. To be successful you have to ensure that you retain control of the enquiry which can often require considerable perseverance to obtain information which you need.

You should
be courteous at all times. It is possible to be firm without being discourteous. If a question is avoided, simply repeat it or rephrase it
explain why you are taking action such as raising assessments, issuing information notices etc. The taxpayer and agent should always know what is required of them. You must also ensure that the taxpayer is advised of their rights
set out your assumptions in any computation, or those you have needed to make in preparing, say, a business model
not presume or appear to presume that the taxpayer has committed an offence before you have evidence. Once you have discovered omissions or they have been admitted you must not adopt a moral or censorious tone, just deal with the facts
not make premature and peremptory demands for information or documents, or meetings, nor should you make routine reference to statutory powers until it becomes necessary to do so
not refer to estimated assessments, closure notices or appeal hearings simply in order to secure agreement to a settlement
try to avoid delay. Obviously it will take longer to deal with some aspects of a case than others and, sometimes it will be impossible to avoid some delay. However, you should remember that delay will make it more difficult for you to encourage the taxpayer to respond quickly.

I copied the above from the HMRC manual EM1601 for tax enquiries so you know what they should be doing for your future reference.

Glad you had a good night sleep! ;)

confused74 · Veteran Member

Thanks Attila x