What to Expect from a HMRC Investigation
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What to Expect from a HMRC Investigation
A HMRC investigation is something that no business wants to face. It can be incredibly stressful. However, understanding what triggers a HMRC investigation and the procedure that follows ensures that it goes as smoothly as possible.
At BCS Accountants, we can assist you during a HMRC investigation. For more information, contact us on 01524 824111.
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Why Does HMRC Investigate Business Tax?
HMRC has the right to check the tax affairs of an individual or business. This is to ensure they remain compliant with the UK tax system.
There are several reasons why HMRC may investigate you, including:
- Significant fluctuations in reported income or profit
- Discrepancies between tax returns and third-party data
- Late or missing tax returns
- Unusual transactions or patterns
- Operating in high-risk industries
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The Three Types of Tax Investigations
There are three types of tax investigations:
Random
HMRC carries out random, routine checks for no reason.
Aspect Enquiry
An aspect enquiry is a targeted review of a specific part of your tax return. For example, an inconsistency on a section of a recent tax return.
Full Enquiry
This a full investigation into every aspect of your tax affairs. It can be triggered by suspicious activity such as tax evasion or non-compliance.
A full enquiry involves an extremely in-depth audit. During this, HMRC will examine business accounts and tax calculations, alongside interviewing directors about company tax returns to ensure it aligns with your declared income.
How far Back Can HMRC go During an Investigation?
How far back HMRC will dig back into your records will depend on the type of the investigation. When no mistakes are found, HMRC can close the investigation without further checks.
However, this depends on whether unpaid tax was due to an innocent mistake, carelessness or deliberately.
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How to Reduce the Chances of an Investigation
There are a number of steps you can take to minimise the risk of investigation:
- Know your tax obligations
- File your returns on time
- Keep your books up to date
- Avoid simple errors
- Develop a tax strategy
Contact BCS Accountants
At BCS Accountants, we can represent you during an investigation. We can compile your records and communicate with HMRC on your behalf. For more information about our services, contact our team at BCS Accountants. We are based in Bolton-Le-Sands, near Carnforth, but cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Border House, 60 Main Road
Bolton le Sands, Carnforth
Lancashire, LA5 8DN
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
