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.
Contact us
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.
© 2019 Warr & Co Chartered Accountants. Warr & Co Chartered Accountants is a member of The Institute of Chartered Accountants in England & Wales (ICAEW). Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact any one of the partners on 0161 477 6789 or contact us via our website forms. Warr & Co Chartered Accountants are registered to carry our audit work in the UK, our audit registration number is C002961684, for more information please visit www.auditregister.org.uk.