HMRC is entitled to check the tax affairs of everyone whether they are individual taxpayers, directors or companies to ensure that the correct amount of tax is being paid.
Timothy Thompson of Kangs Solicitors outlines the position.
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What Can HMRC Check? | Kangs HMRC Compliance Check Solicitors
In the first instance, HMRC will make contact with the taxpayer to confirm that they are conducting a Compliance Check. This contact can made through the taxpayer’s appointed agent, usually an accountant.
HMRC can look into:
- any taxes paid by the taxpayer;
- accounts and tax calculations;
- Self-Assessment tax returns
- Company Tax Returns
- If the taxpayer employs personnel, PAYE records and returns.
What To Expect | HMRC Tax Dispute Solicitors
When HMRC writes to the taxpayer confirming that they are conducting a Compliance Check, they will usually provide an Information Notice outlining the reason for the Compliance Check and requesting the information and any documentation required.
The taxpayer will be asked to provide the required information and documentation within a specified period.
Should HMRC not be entirely satisfied with the information/documentation provided, it may attend the taxpayer’s premises.
If a visit is to be made, HMRC will usually notify in advance the documentation/information required to be available for inspection during the visit.
However, HMRC are entitled to visit premises without notifying the taxpayer. Upon attendance HMRC will be required to produce a Notice to the taxpayer evidencing the basis on which an unannounced visit was authorised; either by an Officer or Tribunal.
Sanctions for Non-Compliance | Kangs Tax Litigation Solicitors
Not Complying with Information Notice
If the Taxpayer does not comply with HMRC’s Information Notice, it may levy a fine against the taxpayer and impose a daily fine until such time as the information is provided.
If the Taxpayer refuses entry to the premises without reasonable excuse, HMRC may levy a fine against the taxpayer and impose a daily fine until such time as entry is granted.
After The Check | Kangs Tax Dispute Solicitors
HMRC will notify the taxpayer of the results of the check which may involve:
- a repayment if too much tax has been paid, possibly with interest on that amount,
- a request for payment of any tax found to be due within thirty days, probably with interest from the date the tax accrued.
HMRC may impose a penalty which may depend upon:
- the reasons for any underpayment or incorrect claim for repayment,
- any admission of error to HMRC within an acceptable period,
- the extent of co-operation during the check.
How Can We Help? | Kangs Tax Defence Lawyers
Kangs Tax Team assists clients in a vast array of tax disputes, enquiries, investigations (both criminal and civil) and prosecutions.
In respect of HMRC Compliance Checks, our Tax Team is at hand to:
- Provide general advice on requests received from HMRC;
- Collate all the required material and provide the same to HMRC;
- Provide advice on appealing Compliance Checks;
- Act as your official agents throughout the compliance check;
- Attend your premises during any visit by HMRC;
- Provide advice and represent you in respect of determination by HMRC following the Compliance Check.
Who to Contact | Kangs Tax Investigations Lawyers
We welcome enquiries by telephone or email.
We provide an initial no obligation consultation from our offices in London, Birmingham and Manchester.
Alternatively, we provide initial consultations by telephone or video conferencing.