An introductory
guide to HMRC tax
investigations
ABV Solicitors
If you run a business or company, dealing with HMRC can be a daunting
prospect. Especially if you have recently received a letter stating that your
company is about to undergo an audit. However, this does not mean that
you have broken the law.
Here, a fraud solicitor answers common questions that they are asked about
HMRC tax investigations from clients, so you will know where to begin if you
have recently been told that you are going to be audited.
What is a tax investigation?
A tax investigation in the UK is
an investigation conducted by
Her Majesty's Revenue and
Customs or HMRC. It will involve
assessing your business or
personal tax returns to check
that they are all correct and that
you do not owe any more tax. It
may be a random part of the audits that HMRC conducts each year. Or it
may be due to discrepancies in your latest tax return.
Based on the type of audit, HMRC will provide you with the documentation
that they need to see from your business. To not get fined, you are legally
obliged to comply with their requests.
What to expect during an HMRC audit
There are a few types of audit you may be subjected to. And what you can
expect may differ.
Full enquiry
A full enquiry will mean that HMRC wants to see everything relating to
finances about your business, such as tax returns, receipts, invoices etc.
This is usually the most extensive type of audit and is the one for which you
should seek help from a fraud solicitor as soon as possible.
Aspect enquiry
During an aspect enquiry, HMRC will only focus on one area of your taxes
such as invoices or VAT returns. This is usually due to a recently submitted
tax return raising suspicions. Once again, a fraud solicitor should be
contacted ASAP to help here.
Random enquiry
A random enquiry is just that. HMRC is looking to meet its quota for
checking on businesses and it is unlikely to be as in-depth as the other two
types of audit.