FIRMS in Worcestershire are being warned to prepare for a tax inspection by HM Revenue and Customs.

Experts are warning that the consequences of the inspection could cost thousands of pounds in both tax and professional fees and could last for several years.

The problem has prompted Droitwich-based Ormerod Rutter, one of the leading independent chartered accountants in the Midlands, to set up a dedicated team of tax professionals to help both companies and individuals when the tax man calls.

"Tax investigations can be quite random and can be extremely difficult to deal with," said Anthony Middleton, tax investigation manager. "Enquiries can cover income tax, VAT, corporation tax, employer compliance disputes such as PAYE, P11D and NIC. They can be both time-consuming and very expensive."

Following the introduction of self-assessment, all businesses and individuals have become potential targets for an investigation.

Based on government statistics, the number of investigations started every week in the UK by the tax man now exceeds 7,000 cases and they are on the increase.

The tax investigation service offered by Ormerod Rutter is designed to prevent the investigation process becoming too much of an ordeal.