How far back can HMRC investigate?

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HMRC will investigate further back the more serious they think a case could be. If they suspect deliberate tax evasion, they can investigate as far back as 20 years. More commonly, investigations into careless tax returns can go back 6 years and investigations into innocent errors can go back up to 4 years.

An investigation will often start with an enquiry into the last year’s tax return. During their investigation into your most recent documents, HMRC will attempt to determine if:

  • There have been no mistakes, in which case they can close the investigation;
  • The mistake was due to an innocent error, in which case they may go back 4 years;
  • The mistake was due to your negligence, in which case they may go back 6 years;
  • The mistake was a deliberate attempt to avoid paying tax, in which case they may go back 20 years.

At any stage in the investigation, HMRC may change its stance on the reason for any mistakes or omissions. For example, if it initially believes that a mistake was a one-off, innocent error but then finds grounds to suspect ongoing negligence, the investigation will be extended to look further back resulting in HMRC requesting more information.

HMRC can also start investigations into an individual’s finances upon information it receives from sources other than the tax return, such as Land Registry information or overseas banking details which can trigger an enquiry. These investigations can go back a similar length of time.

Of course, the further back the HMRC wishes to look, the more stressful and difficult a tax investigation can be for many people. The amount of information and detail requested by HMRC can be overwhelming so it is important to obtain specialist advice at an early stage to ensure you make the right decisions, including challenging HMRC if it is appropriate to do so.

Regardless of what stage of a tax investigation you are at, if you haven’t spoken to a lawyer yet we recommend you doing so. If you would like to find out how we can assist to answer your concerns and resolve your problems, we are very keen to provide an initial, no-obligation consultation by telephone or email (whichever we think will be the quickest and clearest for you) to confirm – if we can help you (we usually can), how we can do this, and to give you a costs estimate so that you can decide if you wish to proceed. Get in touch with us today.

We confirm that we will treat any information you give us as strictly confidential and purely for the purposes of responding to you. When you formally become a client, in addition to solicitors confidentiality, you will be also covered by Legal Professional Privilege (which only applies to solicitors and not accountants or tax advisers) which shields disclosure to third parties seeking information.

Written by Mark Wilson

With over 25 years of experience defending high profile financial crime and regulatory cases, Mark Wilson comes highly recommended from the Legal 500 and Chambers Directory. Mark is an expert at defending Financial Crime cases and those relating to Tax Investigations.

Read more about Mark Wilson.

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