HMRC undertake compliance checks into individuals, sole traders, companies and partnerships.  HMRC are provided with a vast array of information and use this to risk assess Tax Returns.  Where HMRC hold information that suggests that income has been omitted or expenditure has been overstated, they may open a compliance check into the Tax Return.

HMRC will write to the taxpayer and inform them of the compliance check and will request information and documentation to look into their concerns.

Many of the compliance checks into businesses will involve a visit to the business premises to conduct a review of the records and to ask questions arising from the review to the director/partner/proprietor of the business.  Usually these visits will be made by appointment, but in exceptional circumstances HMRC can arrive without giving the taxpayer any notice.

HMRC will usually tell the taxpayer in advance which records they want to examine, which can include the records for the current year as well as years for which tax returns have already been submitted.

The taxpayer is entitled to have their tax adviser present to assist them in dealing with any questions which arise.

The relevant legislation which allows for compliance checks also introduces various restrictions on the powers of HMRC when carrying out these checks.  It is important that the taxpayer is represented by a tax investigations specialist who is familiar with the legislation to ensure that HMRC do not exceed their statutory powers.

At any stage HMRC can decide to escalate the compliance check into a more thorough tax investigation.  This will usually happen where HMRC have found significant errors during the course of the compliance check.

How can WLH Tax Help

When HMRC carries out a compliance check the taxpayer is entitled to have a tax adviser present to assist with dealing with any questions raised by HMRC.  WLH Tax can act as your adviser for the purposes of the compliance check.  By getting us involved at an early stage we are often able to explain any concerns that HMRC raise which will avoid the compliance check turning into a more protracted investigation.

It is important that the taxpayer is aware of the restrictions imposed on HMRC by the legislation which introduced compliance checks.  Many firms of accountants are not aware of the powers available to HMRC in these circumstances and provide HMRC with too much documentation.  As a specialist tax investigations firm, WLH Tax keeps up to date with the relevant powers and restrictions to ensure that HMRC does not exceed the powers granted to them.

WLH Tax will liaise with HMRC in respect of any discrepancies between the accounts and the records with a view to either explaining any misunderstanding or reaching an agreement with HMRC where there is an error.

If HMRC have told you that they intend to carry out a compliance check into your tax affairs, or the affairs of your business, then please contact us for a free, confidential and no obligation discussion.  We are happy to have an initial free of charge meeting with prospective clients.

In This Section

Have a question?

Tel: +44 (0) 207 491 9690 / 9696

We use cookies to improve your experience on our website. By browsing this website, you agree to our Privacy Policy.