Tax compliance checks

What to expect if you are subject to a tax compliance check by HMRC

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

What is a tax compliance check?

HMRC use tax compliance checks to ensure that your tax affairs are in order and that you are paying the right amount of tax. These random checks can be used to check the tax affairs of individual taxpayers as well as businesses.

If HMRC wish to go through a tax compliance check with you, they will write to inform you and they will also tell you which aspect of your taxes they want to check. It could be any of the following:

  • Your Self Assessment tax return
  • Your Company Tax Return
  • Your accounts and your calculations
  • Any taxes you pay
  • Your PAYE records and returns if you employ others.

If you use an accountant, HMRC will contact them instead if they want to check your taxes. You can authorise someone else to deal with HMRC on your behalf if you wish. If you want to do this, you need to write to HMRC and tell them who you want to use instead of yourself and for which tax. You can also authorise a tax agent to deal with HMRC on your behalf.

What happens during a tax compliance check?

HMRC may choose to visit you at your home, your place of business or at an adviser’s office – they will inform you of where they wish to visit you when they write to you. You are allowed to have an accountant or legal adviser with you during the tax compliance check if that helps you. You might receive a penalty if HMRC contact you with an inspection or information notice and you either don’t send them the information they request or you refuse a visit. If you have what HMRC consider to be a reasonable excuse, for example you are seriously ill or someone close to you has very recently died, they won’t make you pay a penalty.

If you think that HMRC should stop the check, you can write to the HMRC office which contacted you and tell them why you think HMRC shouldn’t continue with their check. You can also apply for Alternative Dispute Resolution (ADR) if, at any time, you disagree with an HMRC decision or with the nature of their tax compliance check.

What happens after the check?

Once the tax compliance check is over, HMRC will write to tell you the results of their check. If they think the initial amount of tax you paid was incorrect, you will either receive a tax refund of any overpaid tax (you might also be eligible to claim interest on that overpayment) or you will receive a payment request for additional tax within 30 days if they think you didn’t initially pay enough tax (you will usually be expected to pay interest from the day the tax was due as well). You may also have to pay a penalty.

In making their decision on whether to apply a penalty, HMRC look at factors such as the reasons behind any underpayment of tax or overclaiming of tax relief, whether you informed HMRC as soon as you possibly could or whether it appeared as though you were trying to pull the wool over their eyes as well as how helpful you were during the HMRC compliance check. They will factor all of this into their decision.

If you have any problems paying, you need to tell the officer who is doing the check. If you disagree with HMRC’s decision, you can appeal it – the decision letter you receive from HMRC will tell you how to appeal.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

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