HMRC Compliance Checks / Inspections & Investigations

Quite often HMRC carry out Compliance Checks or Investigations and Inspections.

Whatever they call them they are all pretty much the same in that HMRC want to come into your business and check all your books and records and HMRC returns to see if you have been firstly calculating your taxes correctly and then secondly completing the returns correctly.

HMRC could inform you they are coming to do an inspection or investigation or compliance check normally for one of 4 reasons:-

• Random check of your records for no specific reason (this is done quite often so don’t be alarmed)
• They have reason to believe you have been filing returns incorrectly (whether deliberately or innocently)
• They have been tipped off that you are filing incorrectly
• You haven’t been filing any returns

 

HMRC compliance checks will be carried out without telling you which of the above reasons it is that they are visiting you for.

These visits can be quite daunting but it is important that you are open and honest with HMRC officers during these visits because if they find out during their visit you have been calculating your returns incorrectly they can impose very severe penalties if they feel you have been uncooperative and even fraudulent. If they feel that you have cooperated fully and it is a genuine mistake then there may be no penalties at all other than to pay the overdue tax.

Click on an image to enlarge an example letter