A beginner's guide to HMRC tax investigations
If there is one thing which makes most business owners wake up in a cold sweat, it is the prospect of undergoing an HMRC tax investigation. Even for those who have done nothing wrong, it can fill them with dread and cause a lot of extra stress. As with most things in life, you can take the sting out of a tax investigation by finding out more about it in advance.
The 3 types of tax investigation explained
In essence, HMRC can choose to carry out 3 types of investigation into your tax records. These are: - Full enquiry - Random check - Aspect audit Out of the 3, the full enquiry is the one that is most in-depth. During this kind of audit, all of your business records will be investigated. This is because a full enquiry is usually only done when the authorities believe there has been a large error in the amount of tax previously paid or irregularities in your returns. A random check is exactly as it sounds. You have just been unlucky enough to be picked out of the hat for an investigation. With this audit, there is no initial suggestion of improper practices or errors in your tax returns. Aspect enquiries happen when there has been an issue spotted with specific sections of your tax return. When this happens, HMRC inspectors come in to delve deeper into this issue alone.
What is involved in any investigation?
During an investigation, HMRC will send a team to your business premises at a pre-arranged date. They may also ask to speak with you at your accountant's offices or even at home. This team will audit your accounts, in line with the kind of investigation they deem is needed. In addition, they will usually ask questions about your taxes and query any issues they uncover. You may also be asked to provide inspectors with information and data about your business accounts.
How long do they take?
This is tough to answer as it all depends on the type of investigation and how long the HMRC team need to get the answers they want. It can also depend on how co-operative you are and how quickly you can provide any documents, answers or details.
Help with tax investigations from Tax Care Accountancy
If you are unfortunate enough to be placed under investigation for tax, it is stressful and disruptive. To help get through it, why not call us today on 0208 478 3383? Our expert team can help your business get the best outcome and advise you all the way through the process. If needed, we can also speak with HMRC on your behalf and even act for you in a tax tribunal. Call today for details on our tax investigation and tax tribunal support services.
