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Compliance Checks

Tax-Investigations

One of HMRC’s main roles is to ensure that the correct amount of UK tax is being paid and that the correct level of allowances and reliefs are being claimed. They may check whether this is the case by opening up a “compliance check” (an enquiry) into your or your client’s individual, partnership or corporate tax return.

When HMRC open an enquiry, they must send the taxpayer a formal written notice, which will usually include a request for documents and information relevant to the entries on the relevant tax return. Normally, the taxpayer is given 30 days to provide this paperwork. Failure to respond adequately by the deadline could give rise to penalties or, potentially, prosecution.

HMRC decide which tax returns to enquire into by targeting perceived ‘risks’ in the taxpayer’s position. If HMRC have contacted you or your client, it is likely that they have a specific area in mind which they would like to know more about.

HMRC'S POWERS

Whilst the majority of HMRC’s requests are reasonable, occasionally they will ask for information that they are not statutorily entitled to. It is worth asking a specialist to review any notices before responding as there is a risk of opening you or your client up to further unnecessary scrutiny, which could give rise to more detailed questions or checks (or even give HMRC “discovery” for previously un-assessable years).

There are strict time limits in place for opening a compliance check and it is important that you speak to a specialist to ensure that any enquiry notice you have received is valid before proceeding.

During the course of a compliance check, HMRC can use its powers to visit your premises, either on a pre-arranged or an unannounced basis (where they think that giving prior warning may affect what information is made available to them) in order to inspect the premises, assets and financial records. This can include your personal property.

If HMRC consider that you have not co-operated fully with their enquiry, they may decide to “name and shame” you as a deliberate tax defaulter, which involves publishing your name, address and details of any tax irregularity arising. This can then be searched online by anyone.

HOW CAN HAMILTON ROSE HELP?

We have 25 years of combined experience dealing with HMRC and we have dealt with hundreds of compliance checks and investigations over that time – we know how to manage the process correctly to ensure that they do not obtain information they are not entitled to, that the correct amount of tax is paid and that your best interests and assets are protected.

We know what HMRC are likely to be focusing on and we can help identify and narrow their scope to ensure that the matter is resolved promptly and efficiently.