A firm of accountants in East Sussex is the subject of an unusual criminal investigation by the taxman: who has also written to most of their clients.
Christopher Lunn & Company of Crowborough, who specialise in media based clients, had an unannounced visit from tax investigators in June.  It is unclear if the tax inspectors were using  HMRC’s new Inspection Powers or the PACE “dawn raid” powers.  The taxman took away a lot of papers and subsequently has written to all clients of the firm stating that from information obtained so far, ‘tax returns submitted to HMRC may not be correct for a number of reasons’.   The taxman has given those clients until 28th February 2011 to make a full disclosure: after which any irregularities discovered ‘will be dealt with either by criminal or civil procedures… depending on the nature of those irregularities.’ Of course there may not be any.
The taxman’s letter lists issues of concern such as: excessive claims for expenditure (e.g. travel and subsistence, and use of home as office – which the firm think may actually be underclaimed); accountancy fees for Christopher Lunn & Co. (where the firm’s website acknowledges that these may have been slightly over-claimed in a few cases); company directors claiming also to be self-employed.  So far no arrests have been amde and no charges have been brought against Christopher Lunn & Company or any member of their Team; despite HMRC’s raid being about 6 months ago.  We understand the firm are mounting a robust defence.

What does this mean for me?

If you are a client of Christopher Lunn & Company and have received the generic letter from HMRC then you may need specialist help right now – IF you think your Tax Returns were materially incorrect.   Only a very few people who have fiddled their tax get prosecuted in the UK each year.  HMRC prefer to obtain money settlements, usually under the Civil Investigation of Fraud procedures.  It is usually only those few people who fail to properly handle a tax enquiry who end up with a criminal investigation.  However, if you think your Tax returns are correct then you should not worry unduly.

Lynam Tax partners have a vast amount of practical experience in managing tax investigations and tax enquiries.  We have successfully persuaded HMRC to drop criminal charges in a number of cases, and also assist specialist defence solicitors in cases which do end up in court; when we have been able to substantially reduce the amounts of money being sought by HMRC.  We can advise you on the best course of action and if appropriate, help you manage any necessary disclosures or obtain first class legal representation, in order to obtain the optimum outcome for you, your business and your family.

For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997