I have a client who has been under HMRC enquiry for almost 2 years now. The initial return under enquiry was prepared by another firm.
The enquiry mostly relates to capital gains tax on property disposals.
There is one particular property to which £450,000 of capital expenditure was claimed. We have only been able to provide documentary evidence so far of c£310,000. The expenditure goes back over 15 years. HMRC are therefore understandably arguing to disallow the £140,000.
My client is adamant that the £450,000 claim is an accurate representation of the costs incurred, in fact he believes he probably spent more however he is unable to proivde me with evidence that I can pass to HMRC.
Does anybody have any experience of negotiating a settlement with HMRC where they may meet in the middle? Does anyone have any case law or guidance around this area. My hunch is no and that HMRC are unlikely to accept a settlement.
Any thoughts or assistance appreciated.