HMRC Compliance Checks.
How Does A “HMRC Compliance Checks” Visit Affect Your Business?
An HMRC Compliance Checks remains a formal investigation into your books and records used to run your tax affairs.
When the HMRC decide to investigate your tax, they will first send you an Information Notice requesting information.
How does the HMRC device on who to Investigate?
In the main, compliance checks relate to HMRC having concerns about how the company has accounted for tax. The number of companies registered does not allow the HMRC to make routine visits. Therefore, it visits those it believes to have underpaid tax, either through fraud or mismanagement.
HMRC Compliance Checks:
- Local Compliance
- Specialist Investigations
- Local Compliance Fraud
Upon receiving your notice of a compliance visit, you may be able to ascertain the reason for the visit by the name of the department or inspector on the letter you have received. The Compliance team conducts usual tax examinations many aspects of tax.
If therefore, HMRC considers further action, you need to ensure you seek Licensed insolvency advice urgently.
Why is HMRC Compliance Visiting You?
Having received notification of a compliance visit, your local HMRC’s Compliance team has considered your company as a risk. HMRC runs a business data comparison compared to your competitors, along with a variety of other sources. Therefore, co-operate at all times, telling the truth.
HMRC Compliance Checks – VAT and PAYE Compliance Visits
This type of visit is usual, and most companies either will have had or will receive one. Note though, due to limited resources; they usually need suspicion before firming a visit.
Corporation Tax Compliance Visits
HMRC Compliance Checks visits fall into two sectors. The first being a Full Tax Visit. Like an in-depth audit of the company on behalf of HMRC. It covers full coverage of all the companies records of account. Therefore, considered one of the most severe types of visits.
The second, known as an Aspect Tax Corporate tax visit Aspect tax investigations normally carried out by Local HMRC Compliance. They check specific parts of the tax return as submitted. Additionally, however, they include items such as travel and subsidence expenses.
A full tax investigation, however, a much more serious matter. It involves a thorough examination of the company, usually by looking at the books and accounting records for one particular year. If HMRC launches a full tax investigation, it believes something is wrong with the tax affairs of your business.
Time limits for HMRC Compliance Checks Visits.
The HMRC time limit officially remains five years and ten months from the end of any tax year, after that no compliance visits are allowed. In cases of fraud or serious negligence, this can be 20 years.
After the compliance visit:-
HMRC will write, to tell you the results of the check.
If you have overpaid tax, the HMRC will repay you within 30 days along with interest.
However, if found you owe further tax, you will send a demand to pay the tax due within thirty days. You also may have to pay the interest along with a potential penalty.