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HMRC Tax Investigations-accountants workiing papers

I have just come back from a seminar on tax investigations hosted by an ex Inspector of Taxes and I was surprised to hear him say that you don’t have to handover accountants working papers, although they may have been requested. As unlike the legal system the tax payer ‘is guilty until proven innocent’ I have always checked the working papers to ensure that they support my arguments and handed over working papers to HMRC. I would be interested to hear whether it is common practice not to hand over working papers to HMRC in an investigation and what are the experiences of accountants who have done this.

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25th May 2012 10:22

Not Legally Required

Horse for courses with every enquiry.  If I think it's going to help reach a speedier agreement then the Revenue are welcome to have everything down to the peel from the orange I was eating whilst working on the figures.  It can act to humanise their impressions and approach.  

But for some Revenue people (and with some sketchier working papers) this can be handing one end of a string of sausages to a rottweiler.  They get slow-balled and co-operation goes out of the window if it's going to be exploited.  

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25th May 2012 11:37

completely agree with Marion

you have to be open minded when dealing with an enquiry and try to evaluate how the revenue are working it, and in doing so providing the appropriate level of information to ensure a speedy closure, or a solid defense....

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By refs8
25th May 2012 13:15

To there benefit !

At one Vat inspection gave the Vat inspector in the region of 300 sheets of paper with some very nice complex calculations, that she said she could not understand. Strange thing is enquiry was closed fairly quickly after that. If it benefits the client only let them see them or the bits you want them to see. Otherwise I would challenge them why they need them. All good fun

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Be specific

I would not respond to a blanket "we want all your working papers" request, as that is simply a fishing expedition by them.

However, if they request something specific, capital allowance computations, debtors analysis or whatever, and confirm that that is the specific area they are investigating, then I would happily hand over the papers to prove ourselves right and HMRC wrong.

 

 

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By BKD
26th May 2012 07:56

Sometimes accountants/clients get it wrong

littlemoaner wrote:

 I would happily hand over the papers to prove ourselves right and HMRC wrong.

 

But what if the papers were to prove HMRC right?

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BKD wrote:

littlemoaner wrote:

 I would happily hand over the papers to prove ourselves right and HMRC wrong.

 

But what if the papers were to prove HMRC right?

 

 

Then only an idiot would hand them over. 

 

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25th May 2012 18:13

Absolutely not!

Sorry, although I agree that in some circumstances (i.e. having a reasonable inspector who is NOT out on a fishing expedition), the handing over of working papers would expedite the matter under inquiry, it is not true in all cases.

Remember that any working papers left on file with HMRC might not only be used by this inspector to resolve his inquiry, but can also be used as a basis for other fishing expeditions by other (less ethical) inspectors.

We are more than happy to provide a detailed response to specific questions, but not to support an endless fishing expedition.

Too much of that nonsense goes on at HMRC already.

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