Nearly 4,000 tax investigations still incomplete three years after launch

More than 3,800 tax investigations by HMRC local offices remain unfinished three years after they began, research says.

The figures are contributing to a situation where almost a quarter of all local probes are incomplete more than 12 months after their launch.

Further data, from City law firm RPC, suggests that as of March 2015, there are more than 115,000 open tax investigations against individual taxpayers and businesses.

“Prolonged enquiries by HMRC impose a substantial burden on individual taxpayers and businesses,” said Adam Craggs, partner and head of RPC’s tax disputes team.

“Regardless of the outcomes, those being investigated will have to bear the burden of the costs associated with dealing with HMRC and this can entail substantial professional fees.”

He added: “Introducing a more transparent timescale would ensure that HMRC completes its enquiries in a timely manner, thus keeping costs and disruption to a minimum.

“Currently, the only way to force HMRC to conclude a long-running enquiry is to apply to the tax tribunal for an appropriate direction.”

Our experienced Tax Investigation Services team can help those who are, or believe they may become, subject to a tax investigation. We know that expert advice is the best way towards positive outcomes. For more information about how we can help, please contact us.