These days most businesses could undergo an HMRC investigation at some point. Even if you have done nothing wrong, don’t be surprised to suddenly find a letter land on your doorstep.
It’s next to impossible to entirely prevent against a random investigation. However, the possibility of being investigated will be reduced provided you don’t give the Revenue an excuse to look into your business.
Here are the 3 best ways to mitigate the risk of facing an investigation by HMRC.
File returns and pay tax on time
The number 1 priority for all those expected to pay tax and submit returns, and probably the easiest way to prevent a tax investigation.
Failing to meet tax deadlines will land with you with an automatic penalty and will increase the chances of HMRC looking into your financial affairs. The later you are to pay your tax, the more likely you are to face an investigation further down the line.
Ensure your returns are accurate
As important as keeping to tax deadlines, it’s vital that all the information you provide to HMRC is 100% accurate.
The taxman will undoubtedly raise his eyebrows if you mistakenly add an extra zero, increasing the chance of your business becoming subject to an investigation.
Triple-check all your figures, ensure that all relevant sections are filled out, and don’t forget to provide your signature.
Keep accurate records
It’s important that you keep clear, accurate and well-organised financial records. That way, if HMRC comes calling with questions about your finances, you are easily able to provide them the information you need.
Make sure that you keep paper and digital copies of important financial documents such as invoices, wage slips, receipts and bank statements.
HMRC investigations can be costly for businesses, both in time and money. We offer a tax inquiry service and a tax investigations package that will ease the pressure on your business, should HMRC decide to investigate your affairs.
Fill out our contact form, or call us on 01628 631056 for more information on coping with HMRC investigations.