Avoiding HMRC Enquiries

With current economic pressures being what they are, HMRC are coming under increased pressure to improve tax receipts for the Treasury. HMRC’s response has been two-fold, firstly they are introducing much harsher penalties for non-compliance and secondly, they are re-focusing their attention on enquiries. In recent weeks, we have seen much more activity from HMRC in this regard.

Although there are no sure-fire ways to avoid an HMRC enquiry, there are definitely steps that you can take to attract less attention and/or ensure that the process does not have to be too stressful. A lot of this will feel like common sense, but we feel that it is worth stating.

1. Ensure that you meet all submission and payment deadlines. HMRC will look at your submission and payment history as part of any enquiry and missing deadlines is a good way of attracting attention to yourself.
2. Keep complete and accurate books. HMRC do compare businesses to others in similar fields, so if you accidently record all of your wages costs as being telephone costs for example, it might look anomalous to HMRC’s systems and attract attention. Also, if your record keeping is complete and correct, answering HMRC questions during an enquiry should be much easier for you. Computer software can have a large impact on the accuracy of your books and also how easy it is to obtain data from them.
3. Review your books. If you have an unusual year, it might be worth knowing why ahead of time, so that if HMRC send you an enquiry letter, you will already have the data and knowledge prepared which may make the process less stressful.
4. Use an adviser. Getting good advice is key in any field and taxation is no different. Make sure that you speak with an adviser before making key decisions, just in case there are tax implications that you may not be aware of. Again, making the correct submissions and being able to explain them if required would always be recommended.

If you wish to discuss your accounting, bookkeeping or taxation affairs with us, please ask to speak with one of our team.