Tax
Investigations

Specialist representation for individuals, executors and businesses under HMRC enquiry, from a routine compliance check to a Code of Practice 9 disclosure.

An HMRC investigation rarely arrives at a convenient moment. It usually begins with a letter you were not expecting, concerning a period you had considered settled, written in terms that give little away about how serious the matter is.

Two points are worth establishing at the outset. First, HMRC letters are not all the same. A compliance check into a single figure on a return is a very different matter from a Code of Practice 9 offer, and each calls for a different response. Second, the steps taken in the first few weeks generally have more bearing on the outcome than anything that follows.

Bracey’s has a specialist tax investigations team dedicated to HMRC enquiry work. Our team includes a former HMRC tax inspector with 10+ years inside the department and 11+ years advising clients since.

Identifying the enquiry you are facing

Establishing which process you are in is the first task. These are the ones we see most often.

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A compliance check
HMRC’s general term for an enquiry into a return, a claim or a particular transaction. Most are narrow in scope. Some are not, and some are opened because HMRC wishes to examine a matter without yet saying so.

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Code of Practice 8
Issued by HMRC’s Fraud Investigation Service for complex or high value cases where fraud is not suspected, typically involving avoidance arrangements, offshore structures, or situations where a significant amount of tax appears to be at risk. It is a serious investigation, and it can be escalated to Code of Practice 9 if HMRC’s view changes.

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Code of Practice 9
HMRC suspects deliberate tax fraud and is offering you the Contractual Disclosure Facility. You have 60 days to respond. This is the most serious letter HMRC issues outside a criminal investigation, and the decision taken within those 60 days is very difficult to reverse.

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A nudge letter
HMRC holds data suggesting your position may be incorrect, often from overseas banks, online platforms or the Land Registry, and is inviting you to review it before opening a formal enquiry. These letters should not be ignored.

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An information notice
A formal requirement to provide documents or information under Schedule 36 of the Finance Act 2008. There are penalties for failing to comply, but there are also limits on what HMRC can lawfully require, and those limits are not always observed.

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A discovery assessment
HMRC assessing tax for a year that would otherwise be closed. Specific conditions must be met before HMRC can do this, and they can be challenged.

If you are not certain which of these you have received, send it to us and we will tell you.

How we work

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A first conversation, free and confidential

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Before anything else, we need to understand what has happened and what HMRC appears to know. That conversation is free, it is protected by professional confidentiality, and it commits you to nothing.

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A realistic assessment of exposure

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You need an accurate picture of the tax, interest and penalties potentially at stake, and of how far back HMRC is able to reach. We would rather give you a difficult figure early than a comfortable one that later proves wrong.

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A strategy before a response

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Sequencing matters in an HMRC investigation: what is disclosed, when, in what form, and what is not volunteered. These decisions should be taken deliberately rather than under deadline pressure.

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We deal with HMRC on your behalf

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In most cases, correspondence, meetings and negotiation all run through us, so that you are not managing the enquiry yourself alongside everything else.

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Settlement and penalty mitigation

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Penalties under the Finance Act 2007 regime are influenced by whether a disclosure is treated as prompted or unprompted, and by the quality of your cooperation. Both can be managed actively rather than left to chance.

Our experience

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Bracey’s tax investigations team rings over 55 years of combined experience in HMRC enquiry work.

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Our specialists have led tax enquiry work at some of the UK’s largest accountancy firms.

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We have acted on multiple code of Practice 9 cases.

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We have handled disclosures covering offshore accounts and rental properties.

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Our team also includes a former HMRC VAT Higher Officer with nearly 30 years’ experience of tax administration, including information powers and the penalty regime.

Professional businessmen in suits shaking hands

Specialist areas

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Code of Practice 9

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HMRC suspects fraud and has offered you the Contractual Disclosure Facility. You have 60 days to decide.

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Code of Practice 8

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A Fraud Investigation Service enquiry into complex arrangements where fraud is not alleged.

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HMRC Fraud Investigation Service

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What FIS is, why it holds your file, and how its investigations differ.

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Large business tax enquiries

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Customer Compliance Manager engagement, Business Risk Review+ and enquiries spanning several taxes.

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Inheritance tax investigations

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Compliance checks into IHT400 accounts, property valuations and lifetime gifts.

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Criminal tax investigations

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When HMRC investigates with prosecution in mind, and what to do first.

Why choose Bracey’s

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Specialist experience
HMRC enquiry work is a distinct discipline, and this team does it exclusively rather than as an occasional addition to general practice.

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One dedicated contact
A single adviser who knows your case, rather than a different name each time you call.

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Advice in plain language
We will tell you where you stand and what your options are, without technical jargon.

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A pragmatic approach
Solving the problem in a sensible way that suits the position.

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Complete confidentiality
Every conversation is protected by professional confidentiality, including the first one.

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Offices across the UK
We have professional teams in Hitchin, Hertford, Bishop’s Stortford, Stevenage, Cambridge, Hemel Hempstead, Milton Keynes, St Neots, London, Edinburgh, Glasgow, Falkirk and Mansfield.

Frequently asked questions

How far back can HMRC investigate?

That depends on behaviour. HMRC can go back four years where there has been no carelessness, six years where a return was careless, and twenty years where it considers the behaviour deliberate. Offshore matters carry an extended twelve-year limit regardless of carelessness. A significant part of any long-running enquiry is therefore an argument about which of those categories applies.

What triggers an HMRC investigation?

A proportion of enquiries are opened at random. More often, HMRC’s Connect data system has identified a mismatch between what you declared and what HMRC has been told by banks, employers, overseas tax authorities, online platforms or the Land Registry. Sector wide campaigns, unusually large claims and reports from third parties are also common triggers.

Can I respond to HMRC myself?

You can. The difficulty is that early answers given without advice are hard to revisit, and a well-intentioned reply can narrow your options later. If the letter refers to Code of Practice 8 or Code of Practice 9, please take advice before responding at all.

Could this become a criminal matter?

In the great majority of cases, no. HMRC settles most fraud cases civilly, and the Contractual Disclosure Facility exists specifically to provide a civil route. Criminal investigation is reserved for a small minority of cases. If it is a realistic concern in your situation, we will tell you directly and involve specialist criminal counsel.