HMRC Investigations Into Partnership Tax Returns
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Tax investigations into partnerships typically fall into two categories: "aspect" enquiries and "full" enquiries. "Aspect" enquiries focus on specific entries on the partnership tax return, while "full" enquiries scrutinize every aspect of the return.
​​Aspect Enquiries
Aspect enquiries are generally more straightforward, as HMRC's interest is limited to certain areas of the partnership tax return or accounts.
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Full Enquiries
When conducting a full tax investigation into a partnership tax return, HMRC will typically request all books and business records, including any financial accounts prepared by the partnership or their accountant. They will thoroughly examine these records to verify the accuracy of reported income and expenses.
HMRC often seeks face-to-face meetings with the partners to understand the partnership's operations. Our tax specialist team advises against partners attending these meetings unrepresented and ideally suggests the meetings occur without the partners' presence.
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Additional Focus Areas
While HMRC's primary goal is to establish correct profits, they frequently use these investigations to examine other taxes, such as VAT and PAYE, to identify any irregularities.
Adjustments arising from the investigation will impact the partnership profit or loss declared by each partner on their self-assessment tax returns.
How We Can Help
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Our specialist tax investigation practice is well-versed in HMRC's powers and their limits. We know when and how to challenge HMRC's conduct during investigations. For instance, in company tax investigations, we ensure that HMRC does not extend their inquiry into the personal tax affairs of directors without a valid reason.
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We work closely with our clients and HMRC to address any discrepancies between accounts and records, aiming to reach an agreement that minimizes your tax liability.
If HMRC has initiated an enquiry into your partnership, please contact us for a free, confidential, and no-obligation discussion. We are happy to offer an initial free meeting to prospective clients