Having been in practice since around 2007 I'm not necessarily experience in respect of tax investigations/enquiries. We have had a few basic ones which have all been fine.
Anyway we have one current investigation that we would like to seek some advice on. mainly if we should push for closure.
The client has history with HMRC and a substantial debt with them they they have been chasing since 2008 and given his circumstances will most likely never see any of it. The client has no reason anymore to be filing a tax return and has not since 2013.
April 15 - Notice of compliance check for tax years up to and including 2014.
May 15 - client responds with a P60
July 15 - response from HMRC - can you confirm with bank statements
Oct 15 - after multiple requests to bank finally provide bank statements to us. Nothing to really hide so sent.
Jan 16 - response from HMRC - thanks can your provide explanation of some transactions (see below) and what about some properties we see they sold in 2008
The transactions - client was self employed before they came to us and we were not involved in this. They had decided it was too stressful and one of the members of staff took over the business as a new limited company. The old Self-Employed individual was emplyed by this new company. Customers continued to pay into the old self-employed individuals bank account. This was effectively given back to the company and there was a small difference of circa £150.
Our thought is that we have provied plenty of information and explanations and the inspector is now widening the scope to old properties and does not seem overly focussed. The client appears to have no knowledge of any undelcared income yet HMRC keep aksing if we have any income we wish to declare that they are not aware of. We would liek to push for closure based on this. Is this the right way to go? If not how would others deal with it. I'm happy to take criticism for how the enquiry has been handled so far but please make it constructive so it can be learned from.
Thanks if advance.