Yes indeed. This was something I learned back in the early eighties when a colleague was the subject of a HMRC investigation. He disproved the accusations, but cost him a great deal in accountancy fees doing so. From that day I ensured I had annual insurance in place to cover such investigation fees. Fortunately never needed to claim.
We also insure against tax investigations, the cost isn't the issue, it's the upheaval it causes.
I had my first "discussion" with HMRC many years ago, I learned a lot from that. When they can't find anything, they often pick apart small things to justify their time. Like looking at petrol receipts and seeing if you bought a sandwich as well
A few years ago, and for the first time ever, we submitted a VAT return that was a refund, because we exported a lot over this period. The VAT office decided that they needed to visit us, immediately! Fortunately, our books were all perfect and our export paperwork was all properly completed.
We had a similar period recently when we exported a lot, and had we submitted it, the VAT return indicated a refund. We decided to put a few purchase invoices on query, which meant that they fell over in to the next return. The net result is that we paid VAT, and I reckon avoided another visit. It's often these abnormalities that trigger visits.
HMRC aren't the bad guys, they are just doing what they're tasked to do, they're just employees. If you talk to them about a potential tax liability and what you are planning to do, they will give you pre-approval. Some of these celebs are using very ominous schemes, many of these schemes have been "flagged" by HMRC or their operators have been flagged up as repeat offenders.
You can negotiate with HMRC as well, not everything is black and white. They've just let me defer a £72k corp tax bill, and pay it over 18 months, interest free. If you don't ask, you don't get
