Second Part of Interview


At this point the formal part of the opening interview was over and matters could be brought to a conclusion on the basis that a report was to be prepared quantifying the irregularities. Normally, however, this was inadvisable as the investigator’s further questioning might provide the adviser with insights into the inspector’s areas of concern.


If the interview continued, the questioning moved on to more familiar ground, as in a local tax office enquiry, i.e. lengthy and detailed questions about the business and private affairs of the taxpayer.


Although the questioning was less formal, it was still essential that the replies given were accurate – the client should have been left in no doubt of the importance placed on this part of the interview by HMRC, and should have been wary of making ‘off the cuff’ remarks. The adviser should have dissuaded him from giving answers of which he is not sure and, instead he should have been advised to give an assurance to the investigator that the matter would be researched and included in the report to be submitted at a later date.


The investigator would give particular attention to any potentially contentious items and to this end would ask for full details of any gambling activities or cash hoards that had been referred to. In the case of alleged cash hoards, he would ask in detail about the taxpayer’s cash handling habits, establishing where his cash came from, how it was spent and what happened to any surplus. He would also ask about any non-taxable receipts such as loans, legacies, gifts etc. and whether the taxpayer had himself made any gifts or loans.


At the close of the interview, the investigator would probably ask to visit the taxpayer’s business premises and his home and would request access to any safe or safety deposit box. HMRC had no right to examine these and it should therefore not have been seen as lack of co-operation if such a request was met by a (polite) refusal. The investigator would also request access to the adviser’s working papers. In addition to the working papers underlying the accounts under investigation, he would expect access to the working papers originated in the course of preparing the investigation report.


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