Pictured above: Paul Malin

Push the taxman too far and you could be a Monopoly loser - sent straight to jail, an expert has warned.

Paul Malin, director of tax investigations at Birmingham-based BTG Tax, cautioned that HM Revenue & Customs raids were frequently devastating.

And whether or not you intended to break the law you could still end up in the dock, your 'crime' being an over-aggressive tax mitigation scheme.

"Just when you thought a tax problem couldn't get any worse, it does," he cautioned.

"The impact on business and home life can be incalculable, which is why it is imperative you seek help fast.

"Common sense may suggest that the taxpayer should look for alternative advice from that of the adviser or scheme promoter who has arguably got them into this mess in the first place. The taxpayer should seek out a specialist who knows how to handle these matters, quietly, quickly and efficiently with the minimum amount of disruption. This is often a very tall order but much can be achieved if it is recognised how serious the whole matter has become."

Mr Malin went on: "Any interest by an Inspector of Taxes into a taxpayer's financial affairs, whether it is called an enquiry or an investigation, is often seen as being unwelcome.

"The time and effort it can take to resolve a matter that happened one, two, or even three or more years ago, is bad enough. Having to pay additional tax, plus interest and a financial penalty is just rubbing salt into an already open wound.

"Tax mitigation schemes to reduce the amount of tax that may be due have been commonplace for many years.

"Nearly all scheme promoters will give a health warning - or perhaps, a 'wealth' warning. HMRC does not like such 'products' as they see it as a mechanism that pushes the boundary of tax compliance too far in the taxpayer's favour. Typically, HMRC will investigate the tax return of every person who has taken part every year.

"Quite quickly, a taxpayer will not have any certainty over how much tax they should have paid until the scheme has been thoroughly investigated. This can take years. This almost civilised approach, undertaken by regular exchanges of letters by post, is what can be referred to as the litigation strategy of HMRC."

But this, he said, was sometimes the lull before the storm.

"Taxpayers should be aware that HMRC can hit back - and hard.

"From time to time, HMRC can mount what is commonly known as a 'raid'. It is more properly referred to as a search and seizure operation targeted against a taxpayer and can be undertaken over more than one address of the same taxpayer, simultaneously. They can often involve other connected parties such as the taxpayer's advisers.

"Such actions take considerable planning and resources and are, therefore, not undertaken lightly or very often. When they are executed, they can have a devastating and disruptive effect on all concerned, especially if the police are in attendance in order to keep the peace.

"However, the follow up consequences can be felt for a much longer period, particularly if criminal proceedings result.

"Yes - criminal proceedings. There are not many people who deliberately set out to break tax laws. But it can happen, particularly where such tax mitigation schemes are seen as being too aggressive by HMRC. Then it can become akin to a fraud.

"In these more extreme circumstances, all those involved may be approached to provide a witness statement. Suddenly this is not just a bit of a spat with the local taxman - this is serious stuff that will no doubt involve the services of a solicitor. For some, their life has just gone from bad to worse.

"Imagine receiving a letter from HMRC that has 'Criminal Investigation' in bold as its heading. It is stark, it is real and it needs dealing with."

But Mr Malin added: "All is not lost. Providing the taxpayer does not assume the 'ostrich position', but proactively seeks proper advice, life can get better."

For more information about Begbies Traynor, please visit their website here: www.begbies-traynorgroup.com