EM2056 | Working the Enquiry: Claims of Non Taxable Sources: Review of Explanations

The following points are of general application to enquiries, but are particularly important when considering explanations involving cash hoards, betting profits, legacies etc.

• Facts alone are important. As much factual detail as possible, however trivial or unimportant it may seem at the time, should be recorded. Notes of meetings should be agreed in writing with the taxpayer and agent.

• Contradictions in factual detail, or in explanations supplied at different times, should be carefully noted for future use. The refusal of material facts, names, or other details, can be significant.

• Failure to remember should not in itself be regarded as proof that the taxpayer has something to hide. On the other hand, an apparently good memory for particular facts only, usually those supporting the claim, may cause concern.

• All explanations should be considered critically in the light of any information or anomalies from the review of the business.