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Any tax enquiry is going to be difficult, stressful, and likely costly. However, there are two types of tax enquiries. The first is an aspect enquiry. This is an enquiry into one aspect of your self assessment, and does not typically require documentation for proof. Basically, when investigators do an aspect enquiry, they find something wrong with your tax return, tell you what the problem was, and proceed to charge you penalties and additional taxes. However, if you have a tax professional on your side, or Tax Enquiry Insurance, you can sometimes avoid the penalties and additional taxes by professionals using the HMRC investigator’s manuals against them.

A full tax enquiry is one where your entire self assessment is in question. These enquiries can go back several years, and are quite complicated. Full enquiries require complete documentation, business records, employment records, and proof of all deductions. These tax investigations typically result in multiple penalties and taxes, and can be very, very costly. Anytime you have a full tax enquiry, you should definitely get tax advice.

You should be able to determine the type of HMRC enquiry being investigated through the open dialogue stage of the enquiry. This may take the form of a letter or phone call. However, sometimes the dialogue is not clear, and you need to ask for clarification. Also, aspect enquiries can soon become full enquiries if you are not careful, so it is best to seek tax consultancy any time you have an enquiry.