One of my clients had a tax return checked. Not one I prepared. I reviewed the data, made a few small changes to his tax return, (about £350) refiled it and sent the info requested to HMRC. His income was below the PA in any event so my changes made no difference. He had a non taxable pension because of injuries sustained at work. I spent more than 10 hours checking absolutely everything and producing several spreadsheets to back up my conclusions. I asked the Inspector why the review and was told it was because he hadn't responded to a letter from them. Sent to his previous address where he had lived with his now ex wife. HMRC already knew about his pension because it had been queried in the past. Guess what - after all that nothing wrong with his (amended) return.
So, no they don't know everything.
Back in the 80s I worked for one of the top 3 firms in the UK. We had a dedicated tax inspector allocated to us. Now it's very difficult to speak to anyone at the tax offices who knows anything.
There is a lack of resources but they are directing the resources that they do have to the small people and not the larger companies. Apparently Foxtons got a few million from the state during the lockdowns and have just paid their chairman a large bonus.
Meanwhile, HMRC are now looking at recipients of the SEISS grants to see if they have made a fraudulent claim. This includes people who stated on their application that they thought their business would suffer. I'd like to know how, back when the first claims were made, people were expected to know if it would actually suffer. In any event they have to pay income tax and Class 4 NIC on the grants.
Angela Rayner lashes out and calls Sunak “pint sized loser”.