Usually an investigation will be what is known as an aspect enquiry, where the inspector asks questions about particular items on your tax return or in your accounts. For example, they may ask for an analysis of consultancy fees or Other Debtors in your accounts. These enquiries can usually be dealt with by correspondence and closed within a short time without any need for a meeting. On the other hand, it may be a full enquiry into your accounts or tax returns as a whole and these will usually last much longer and may involve a full-scale audit of your accounting records.

Unless there is evidence of underpaid tax, the Revenue will normally only be able to open an enquiry into your tax return for a certain period of time. This is known as the enquiry window. The time limit used to be 12 months from the deadline for submitting a tax return but has now been amended to 12 months from the date it is actually received by the Revenue, so there is no longer a deterrent to filing tax returns early. They can only open an enquiry after the deadline has passed if they make what is known as a discovery assessment. This means that, according to them, you have not reported the correct figures or disclosed the full facts in your accounts or tax return.

It is important to seek professional advice if you are faced with a tax investigation as you may be asked to provide more information than the Revenue has a right to see or be given an assessment based on figures derived by the Revenue from their own business models that are totally inappropriate in your case. An enquiry may also drag on for much longer than is really necessary to investigate the issues raised if it is not managed properly, and sometimes it may be necessary to argue technical points with the Revenue beyond the knowledge of most taxpayers.