What is it?
This is where a COP 8 has revealed further earlier years also with a failure to declare or to have under-declared. HMRC can then turn this into a COP 9 investigation. This is far more serious and also allows HMRC to go back as many years as needed (up to to 20) this can often lead to a criminal prosecution.
Whilst we can initially review the aspects that HMRC have against you to see if we can disprove them or find ways to reduce your tax by other allowable positions, it may mean once we have compiled the report you would need legal representation to take matters further if you wished to continue to dispute the position.Case Study
Background
Our client sold a house back in 2009, this was a multiple bedroom home with 4 acres of land in which they kept their horse. Both were elderly and not in the best of health and the proceeds had gone to build a bungalow so there were very few funds remaining. HMRC were asking for £145,000 capital gains tax on the basis that the land was in excess of 0.5 hectares (1.23 acres) and this was deemed to be liable to Capital Gains Tax.
This is defined by HMRC as a tax on the profit when you dipose/sell something (an asset) that’s increased in value and this is the figure that HMRC were demanding tax be paid on.
Action
We provided evidence that the property was bought solely with the intent for the land to stable their own horse. In addition, it was bought as one title deed and sold as one title deed – a business had never been conducted from the property and there were photos and evidence that this was reasonably enjoyed which was imperative to our case.
Conclusion
With the help of the valuation office, we got their high charges reduced to just £210 (£105 for each client).