Our insurance broker engaged a local firm of advisors for their routine accounting and tax compliance needs. After restructuring the business, HMRC raised an enquiry into the process and challenged the value of capital gains that had been calculated by the directors. If HMRC were successful in their challenge, the directors would face a £1m tax bill. After 18 months of enquiry, the advisors had not been able to move the case forward.
An insurance specialist in our Tax Investigations team picked up the case and re-presented the arguments to HMRC to support both the commercial aspects of the transaction and the basis of valuing the business. After two letters to the inspector and a conference call, HMRC accepted that the returns were correct, and the £1m potential tax liability was dismissed.