A word with Mark Taylor
Mark Taylor joined Buzzacott in early 2016 as Head of the Tax Investigations and Dispute Resolution team. Having worked for 20 years for HMRC as a Senior Tax Inspector and accredited Financial Investigator, serving in all of HMRC’s elite investigation offices, Mark has witnessed first-hand how the industry has changed. Here, we place Mark under investigation.
What attracted you to the world of tax investigations?
Back when HMRC was known as the Inland Revenue, I started my career in the admin team of the solicitor’s office where I processed criminal and legal cases as part of the review process. I didn’t formally give decisions to prosecute but I did work on the legal admin side. Through that I read all the cases and just absorbed everything and thought ‘I fancy a crack at this’. When a vacancy came up at one of the offices, I applied and was appointed. I was 21 and the youngest criminal investigator that had ever been taken on by the Inland Revenue at the time.
So what made you switch sides?
When I hit 20 years in HMRC I was extremely proud of what I had achieved. But thinking ahead and just looking at the way the organisation had changed, I just felt that the flame wouldn’t be as strong if I stayed. So I left HMRC and went into private practice and it was just a natural fit with my skills that I would represent clients. Firstly, this was because I like helping people and I get great satisfaction from that; secondly, because HMRC doesn’t always get it right and it’s important that somebody out there is prepared to point that out to them. I will robustly defend my client but, equally, if my client has an issue and has a disclosure that needs to be made, I’ll make it.
How can a client get the most out of your working relationship?
Without question, by being truthful. However bad the situation is, it’s nowhere near as bad as people believe it to be. Sometimes it might take me a while to find that eureka moment but there is always a solution. I am never here to judge anyone: it’s all about helping people and bringing their affairs to a state where they can get on with what they’re best at.
What are the 3 most common questions you get from clients?
- Why have I been selected for enquiry?
- How long is the enquiry going to take?
- Am I going to prison?
Is it difficult keeping up with the changing legislation?
That is without a shadow of a doubt the hardest thing. I have to devote a good deal of my time to ensuring that my technical compliance and reading is completely up to scratch.
I’ve recently been accepted onto the Institute of Chartered Accountants’ Executive Committee of the Tax Investigations Practitioners Group. This means that I, alongside a few others, will be representing the views and concerns of the practitioners group in meetings with HMRC.
What’s your favourite pastime?
I am a UEFA B (Part 2) qualified Outfield and Goalkeeping Coach and do volunteer work with kids through Grassroots Football Academy. The children I coach primarily come from disadvantaged backgrounds and Grassroots allows them to come in and play the game in a safe environment. It’s just fantastic to get reports back from schools six weeks later saying that their behaviour has improved. I enjoy doing that.
How HMRC approach investigations
In recent years HMRC has come under mounting pressure to maintain its annual tax revenues. As a former Tax Investigator, Mark Taylor knows more about HMRC than most. Here, he provides an exclusive insight into the tactics deployed by HMRC to maximise its compliance yield take.
HMRC has undoubtedly improved its risk assessment and case selection techniques. While some HMRC investigations are commenced on a purely random basis, most are selected because HMRC believes it has identified risks concerning the accuracy of a taxpayer’s affairs. HMRC has placed growing reliance on its powerful data interrogation software called ‘Connect’, which scours more than a billion items of data and information from multiple public and private sources, including banks, local councils and even social media to identify anomalies that suggest non-compliance in taxpayer declarations. Since its launch, Connect has been responsible for the collection of over £3 billion of extra tax.
HMRC should only ask for documents and information it ‘reasonably requires’ to assist its check. It should not ask for personal banking records as a matter of routine, but regularly does so, and needs to justify such requests, but does not. All HMRC document/information requests need to be carefully considered to ensure HMRC does not obtain anything to which it is not entitled. Boundaries do appear to be pushed by HMRC.
Not what it seems
HMRC routinely requests to visit taxpayer business premises at the opening stage of an investigation, even if the business premises is their home. HMRC believes this approach achieves a better outcome in terms of identifying/confirming errors and ultimately increasing compliance yield. HMRC’s ‘visit request’ is strategically worded to appear low-key and make the reader feel it is routine and even mandatory. Taxpayers must be represented at such visits to protect their interests and to challenge any misconceptions or misunderstandings HMRC may have following its case selection review. Such visits do not have to involve the client in every instance and can be done at an alternative location to the business premises.
Voluntary means exactly that
Once HMRC has obtained all the documents and information that are reasonably required to assist its check, it typically undertakes a records examination. HMRC inspectors look to discredit the accuracy of the business records upon which the accounts and tax returns have been prepared. HMRC inspectors routinely request a meeting with the taxpayer to further test the accuracy of the taxpayer’s affairs and challenge them. Such meetings are stressful, disruptive and not always necessary. HMRC produces notes of any visit or meeting to record the discussions. HMRC issues these and seeks signed agreement. Careful consideration needs to be given to the accuracy of the notes, as they often reflect the position from an HMRC perspective or viewpoint and can be used by HMRC in subsequent proceedings. Attendance by the client and the signing of any notes is entirely voluntary and should be considered on a case-by-case basis.
Get in touch
For more information and advice specific to your circumstances, please get in contact:
Head of Tax Investigations and Dispute Resolution
T | +44 (0)207 556 1243
E | firstname.lastname@example.org
W | www.buzzacott.co.uk/specialist-teams/tax-investigations/practical-advice