HMRC COMPLIANCE CHECK – What is it and what should I know?

“We see a lot of HMRC Compliance Checks, because they cover so many different types of people and companies for example, and range from simple routine enquiries into tax returns (sometimes reviewing just a few entries) as well as full business enquiries (where the entire business and all its transactions are scrutinised), through to the very largest business / corporate enquiries (usually reviewing multiple taxes and very in-depth). So, not all tax compliance checks are the same.

Compliance Checks are initiated by many parts of HMRC, but one is more likely to recognise letters coming from Wealthy and Mid-sized Business Compliance (WMBC) and Individuals and Small Business Compliance (ISBC) the most. The name, Compliance Check is preferred by HMRC because they cover informal enquiries as well as formal ones e.g. under Section 9A of the TMA 1970 for personal taxes, and Paragraph 24 of Schedule 18 to the FA 1998 for corporation tax; which use ‘notice of enquiry’. These terms are used inter-changeably with tax / HMRC enquiry and even tax / HMRC investigation.

For our comprehensive guide, see: https://pure-tax.com/tax-investigation-hmrc/hmrc-compliance-check.

Tell me more about HMRC Compliance Checks

Every year, c.300,000 compliance checks are opened into individual’s, partnership’s, and companies’ tax returns. This is to check whether the correct amounts of tax are being paid and that the correct levels of allowances and reliefs are being claimed.

In the case of a formal enquiry, as above HMRC must send a Notice of Enquiry in writing, within 12 months of that tax return being submitted. At the same time, HMRC requests documents and information relevant to the entries on the tax return in question. These requests must be relevant to the entries on the tax return. It is important to ensure any enquiry notice received is genuine and valid before proceeding.”

 

See the full article published on LinkedIn: HMRC Compliance Check – What-should-I-know?