Payment of taxes at the right time and making proper financial transactions to get a clean chit from the tax investigation systems is perhaps the sole reason of tension amongst individuals and businessmen around the world. However, it’s a fact that most of the people are not aware of the correct ways of dealing with financial transactions or acting as per the proper rules of establishing a business. Therefore understanding the HMRC tax investigation system can enable people to be safe from harassments as far as tax payments are concerned.


Meaning Of HMRC And Its Chief unctions: HMRC stands for Her Majesty’s Revenue and Customs. It is a body under the UK Government which is not under any Ministry. This department is responsible for collection of taxes. Apart from the collection of taxes, HMRC also deals with the payment of some state support as well as the administration of various government regulations such as payment of national minimum wages. Therefore any kind of underpayments relating to the areas of jurisdiction by HMRC can be subject to investigations and definitely punishable.

A Clean Concept About HMRC Tax Investigations: If an individual receives a letter from HMRC for a tax investigation then obviously it’s an implication to the fact that the department feels that the individual has in some way underpaid his taxes. So very simply, a tax investigation by HMRC means an enquiry through every detailed transactions and legal affairs of an UK individual, a business house or may be some other entities. They have the right to generate enquiries in every matter that falls under their jurisdiction such as VAT, Income Tax, Tax Credits, Capital Gains and Corporation Taxes. So when any individual or business entity falls under the tax investment proceedings then surely there is some information with the Tax Inspector which leads him to believe that the individuals or entities are creating tax losses for the Government. HMRC investigation also pertains to speculate and identify individuals or businesses that are operating outside the tax system and therefore robbing off the government from its justified tax collections.

Different Forms Of UK Tax Investigations:There are different types of tax investigations under different codes of the HMRC systems such as-

  • Investigation on Self Assessment Tax Return- It’s a check up over the different aspects of one’s self assessment returns.
  • Code of Practice 9- It is a very speculative and top to bottom investigation procedure for detecting serious tax fraud suspects
  • I.F or Civil Investigation of Fraud- This is another tax investment conducted under Code of practice 9 where the detected underpaid taxes are minimum 75,000 pounds
  • Special investigations- These investigations are for suspected tax frauds where minimum amount is 500,000 pounds
  • Tax Credit Investigations- These investigations are related to tax credits of the individuals or the businesses
  • VAT investigations- These procedures are for enquiring over suspected underpaid VATs

A good thing about HMRC’s investigations now is that they allow mild and comfortable settlements for individuals or business entities who admit their underpayments of taxes. HMRC also launches campaigns for such voluntary disclosures.

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