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Why might HMRC start a tax investigation into your business?

Why might HMRC start a tax investigation into your business?

When it comes to running your own business, making sure you have your accounts in order is key. It is also essential to submit any tax returns to HMRC on time. Whether it is the simple end of year accounts for sole traders or more complex tax reporting for Limited Companies, this is an area you must get to grips with. You may have also heard of HMRC selecting certain businesses for a tax investigation after returns are sent in. This basically sees inspectors look through your records to verify that your returns are correct. Needless to say, any discrepancies can prove very serious. But why might your business be chosen for a tax investigation?

Errors or inconsistencies in returns

Compliance checks can be triggered when the figures you submit on a tax return are obviously wrong. If for example, you own a large national business with significant turnover but declare a small amount of tax, HMRC would find this suspicious. This would then be likely to trigger a tax investigation, so they could verify your figures. It might also be down to inconsistencies in your return, missing figures or the fact it just doesn't make sense. If there is doubt like this, tax inspectors will want to clarify matters in person usually.

Tip-off from someone else

While most compliance checks are set off by incorrect, incomplete or non-sensical returns, there are other reasons you could be chosen. One you might have heard of before is HMRC getting a tip-off from someone who claims you are not being truthful in your tax returns. While there will usually need to be some proof of these claims provided first, this could be the reason tax inspectors wish to see you.

Bad luck

Of course, it might just be that you are unlucky! Compliance checks are also made at random sometimes and see businesses chosen without any real reason. These random spot checks are designed to keep businesses on their toes and put them off from cooking the books. It hardly needs saying though that they are a real pain for the vast majority of honest business owners out there. Sometimes it is just a case of bad luck that sees your name pulled out of the hat for a check.

Help with tax compliance checks from Taxcare Accountancy

It goes without saying that having to endure a compliance check from HMRC is a real chore - whatever the reason behind it. Why not let the experts at Taxcare Accountancy help if it happens to you? Our tax investigation & tax tribunal support service means you do not have to face it alone. We will be there each step of the way to offer professional advice and guidance. Contact us at info@taxcareaccountancy.co.uk today for more details.

Affordable Pay-monthly Packages

We offer a full range of services to limited companies, solo trader, partnership, charity, LLP, CIC as well as individuals. We have arranged our services into easy to choose packages that suit your needs.

Start-up
£ 60  / Month (+VAT)

This price plan is suitable for the start-up companies who are not VAT registered.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Payroll & RTI submission for 1 employee
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Assisting with correspondence from HMRC and Companies House
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 80K
Limited Company
£ 100  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered and turnover is less than 100K with a couple of employees.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 2 employees
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • MTD VAT returns submissions – quarterly
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 100K
Company Pro
£ 150  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered; turnovers are more than 100K and have 2 directors and shareholders.

  • Company formation (if required)
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 5 employees (Free)
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Unlimited face to face advice and email support
  • 2 Directors
  • 2 Shareholders
  • Annual turnover should be less than 200K
Company Premium
Let's talk.  / 

This bespoke price plan is suitable for the companies who are VAT registered, with more directors, shareholders and employees. Also, annual turnover is more than 200k and requires further bespoke services.

  • Company formation
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission all employees
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for the all Directors (Free)*
  • Unlimited face to face advice and email support
  • Flexible and can be discussed
  • Annual turnover should be more than 200K

Add on Services

  1. Personal Tax Returns

    This price plan is suitable for self-employed individuals, landlords and those who need to submit Self-Assessment Tax Returns.

    If you need to submit the Self-Assessment Tax Return, we can offer you competitive prices starting from £150 + VAT. Price can vary according to your nature of income. Please contact us for more details.

  2. Tax Investigation
  3. Business Legal Support
  4. Company Formation
  5. Business Mentoring
  6. ARA accounting services for ATOL & ABTA travel companies

    Our commitment to you is that we’ll ensure all the information we’ve submitted to the Civil Aviation Authority is up-to-date and accurate. 

Taxcare Accountancy was formed to provide Small & Medium Businesses with an affordable, proactive and professional accountancy services…