The terms investigation, enquiry and compliance checks are interchangeable and essentially have the same meaning. HMRC’s compliance activity also include nudge letters, one to many and the correction of returns.
 

• Do not assume you have done everything right, that you have nothing to hide and all will be well.  HMRC compliance staff are tasked with raising funds for the government, from you the unfortunate target of their enquiry.  Their compliance activities are measured by yield, that is by their success or failure in identifying further tax, interest and penalties from their enquiry work. This is measured at every level, individual, teams and business units.  Their compliance staff can be skilled, determined, diligent and focused on finding errors that you may well be unaware of.
   

• Do not assume you will be able to explain away their questions:  Get advice from a tax advisor that is knowledgeable and experienced in dealing with HMRC compliance staff.  Time and again we see inappropriate responses to HMRC which have costly repercussions for the taxpayer.
   

• Do not ignore HMRC:  They have a vast array of legal information and inspection powers that they can use to enforce cooperation through the application of fixed and daily penalties.  Not replying demonstrates a lack of cooperation that can increase tax geared penalties charged for offences.
   

• A tax enquiry can be a highly stressful life event:  Expert support can help by explaining the process, the reasoning behind HMRC’s questions and the risks you face.  This can help reduce stress.  The earlier you get an expert on board the better.