Tax audits are routinely carried out by HM Revenue and Customs if you are registered for VAT or have employees paid by PAYE. In this situation tax audits can be expected every 5 years or so, however if the HMRC suspects that tax is being underpaid, there are irregularities or inaccuracies in your tax return, this could trigger a tax investigation.
A tax investigation can last several months and usually begins within twelve months of the due date of the tax return it relates to or if you missed the due date, twelve months after the actual date you filed the return. There are occasions where an investigation broadens to include for example a corporation tax investigation, which will include enquiries into a director’s personal tax affairs.
Whether it’s a tax audit or investigation it can be a stressful time. We can help you by checking through your records and systems and manage all documentation and correspondence required by HMRC to ensure the investigation is quickly resolved and there are no unreasonable delays.
Tax Investigation and Audits
Reasons for Tax Investigation
- You file your tax returns late
- You pay your tax bill late
- You make errors on your tax return that need correcting
- Your tax return has inconsistencies between your businesses trading success and your standard of living
- Your income has reduced but your costs have increased
- Your costs are unusually high for a business in your industry
- You operate in a high-risk industry; i.e. take cash payments
- Your business is in an industry that the HMRC have decided to target
- You are reported to the HMRC
Other occasions when you may need help to avoid a tax investigation
- You are the beneficiary of an overseas trust or settlement
- You are non-uk tax domicile
- You are your parents still have property abroad but you reside in the UK
- You are now responsible for money, assets or an offshore tax structure that you have inherited
- You were misinformed about the tax liability of an overseas bank account
- You kept money received from the disposal of an overseas asset
- You have money being held on your behalf by an individual or company overseas
- You have received a monetary gift that is held abroad
- You have access to or own a bank account overseas
- You own property overseas