In the tax year to March 2004, 142,000 cases were taken up by the Inland Revenue. That was up 4,000 on the previous year, and there is a renewed determination to track down taxpayers who, through confusion, negligence, or dishonesty, pay less than they should. So what do you do when you find yourself the subject of a Revenue inquiry?

Revenue inquiries usually happen because there is a small query on a return but are sometimes simply random. Inspections are more serious: here the Revenue suspects large-scale evasion. The self-employed and business owners comprise the vast majority of cases.

"To start with the Revenue will ask for documents, and, perhaps,a meeting. Be careful: your not legally obliged to supply documents that are not strictly relevant, and you have no obligation to attend a meeting. But you could be fined £60 a day for withholding relevant papers."

Angela Brooks Wong founded TaxRelief in 2003, to help tax-payers to fight unfair Revenue claims, and she has experience of just how wrong the Revenue can go.
First, she advises, the self employed should ensure faultless record-keeping. The Revenue can go back six years in a standard inquiry, and 20 where intentional evasion is suspected. Good records are not only demanded by law, but will help limit the inspector's claims. Informed negotiation, she says, can bring estimates down to earth.