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HMRC Compliance Check

Overview of HMRC Compliance Checks

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HMRC conducts compliance checks on individuals, sole traders, companies, and partnerships to ensure accurate reporting of income and expenditure in Tax Returns. With access to extensive information, HMRC risk assesses these returns and may initiate a compliance check if discrepancies are suspected.

Key Steps in Compliance Checks

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  1. Notification and Information Request:

    • HMRC informs the taxpayer of the compliance check through a written notice.

    • They request relevant information and documentation to address their concerns.

  2. Business Premises Visits:

    • Many checks involve a visit to the business premises.

    • Appointments are usually scheduled, but HMRC can arrive unannounced in exceptional cases.

    • HMRC specifies in advance which records they wish to examine, which may include current and past records.

  3. Right to Representation:

    • Taxpayers can have their tax adviser present to assist with HMRC queries.

  4. Legislative Restrictions:

    • Compliance check legislation introduces limits on HMRC's powers.

    • Representation by a tax investigations specialist ensures HMRC does not exceed these powers.

  5. Escalation to Thorough Investigations:

    • Significant errors found during a compliance check may lead to a full tax investigation.

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How We Can Help

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  1. Early Stage Involvement:

    • Our specialist tax team can act as your adviser during the compliance check.

    • Early involvement helps in explaining concerns to HMRC, potentially avoiding escalation.

  2. Knowledge of HMRC Powers:

    • Awareness of legislative restrictions ensures that HMRC does not exceed their statutory powers.

    • Many accountants may provide HMRC with excessive documentation; we prevent this by controlling the information flow.

  3. Handling Discrepancies:

    • We liaise with HMRC to explain discrepancies or agree on errors in accounts and records.

  4. Professional Representation:

    • Ensuring that taxpayer rights are protected and that HMRC’s queries are handled professionally

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If HMRC has notified you of a compliance check on your tax affairs or your business, contact us for a free, confidential, and no-obligation discussion. We offer an initial free-of-charge meeting for prospective clients.

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