Everything You Need to Know About HMRC Tax Enquiries

Hearing the words ‘HMRC tax enquiry’ may seem daunting, but there’s no need to panic. It doesn’t mean that anyone suspects you of any wrong-doing; they are merely checking that the information on your tax return is correct. There is also a possibility that you have been randomly selected to have your tax return checked and verified.

What is a tax enquiry?

It is a simple process where the government checks the information on your tax return. HMRC are looking to ensure that all of the information is correct and filled out correctly. They may request additional information, or they may want to ask you some questions.

After receiving a letter from HMRC, you will usually have 30 days to provide them with everything they ask for. However, you can ask for an extension if you feel that you can’t fulfil everything in this timeframe. Investigations vary in time, depending on what they need to clarify, and how big your business is.

Why are they contacting me?

As previously mentioned, the government always make random checks, and they have to check a certain percentage of tax returns, to ensure everything is above board. However, they may have noticed an error in your submissions, or they may have also received an anonymous tip about your business.

You must keep all of your documents in a safe place. If you are selected for investigation and you can’t provide them with what they are asking for, you could be fined up to £3,000.

Stages of the enquiry

Receiving a letter from HMRC- this is the first thing that will happen. It’s essential to check the deadline on the letter and to verify that the information they are requesting is reasonable.

Formal request- if you ignore the original request, you will receive a formal one, and you may be penalised for missing any deadlines.

Potential meeting- HMRC may request to see you in person and can make a note that you are happy to cooperate. Make sure that you prepare for the meetings and have any questions ready for them.

The main meeting- always request the agenda, and make sure they stick to it. If the interviewer goes off track, you are entitled to stop the meeting. Ensure that you take everything you need to, and always be prepared with questions and concerns. Never answer a question with a guess, as providing false information can land you in a lot of trouble.

After the enquiry

If everything is as it should be, then HMRC will close the investigation. If you have overpaid tax, then you will receive a refund, but if you haven’t paid enough, then you will have to change your tax return, and pay what you owe.

Having a good accountant can help you along the way and make the process much more comfortable. Ask the experts! Get in contact today to see how we can help you and your business.