HMRC investigation accountants are experts in helping business owners whose accounts are under scrutiny from the taxman. They can help you prepare for an investigation and reduce the risk of falling foul of the law, whether you are guilty of a tax-related mistake or fraud.
In most cases, HMRC investigations are triggered by a single mistake or a pattern of errors that raise suspicion. If you are not sure why your account has been selected for investigation, it is a good idea to consult with an expert as soon as possible. They will be able to explain what is going on and advise you of your best course of action.
The amount of time HMRC spends investigating your accounts HMRC investigation accountants depends on the severity of the discrepancy and their findings. In general, they will investigate your accounts and tax submissions for the previous four years.
If the HMRC investigators find that you are owed money, they will calculate how much and when you should pay it. They will also take into account interest and any late payment penalties that you may be liable for. In some extreme cases, the taxman can also charge you with a criminal offence, although this is rare.
You will need to provide all the information and records that are requested by HMRC and answer any questions that they may have. If you fail to supply this information by a formal deadline, you will be liable for a penalty of up to PS300 and an extra PS60 per day for each day that you are in default. You can ask for more time if you can demonstrate that the delay is reasonable, but it is important to seek professional advice before refusing to provide this information.
The HMRC team conducting the investigation will visit your business premises or your accountant’s offices to check your accounts and look at any invoices or receipts you have submitted. They may also want to speak to you or your employees about any expenses or income that have been claimed.
They will compare your figures with the average profit/loss of a business of your size and industry and look for any large variations in either direction that might raise suspicion. They will also want to establish how your lifestyle matches up with the income you are reporting.
If you are found guilty of tax evasion, the penalty will be a significant sum of money, but this is unlikely to be the end of it. In most cases, the taxman will still want to collect any outstanding amounts that you owe and they can go back up to 20 years to recover this.
The best thing that you can do to minimise the chance of an HMRC investigation is to keep your accounts and books up to date. This will make it easier for you to spot any issues and respond to enquiries quickly. You can also appeal a decision that you don’t agree with if you do not understand the reasons behind it.