Tax compliance checks (2024)

Your tax affairs may be checked to make sure you’re paying the right amount. This can happen if you’re an individual taxpayer or if you run a business.

This guide is also available in Welsh (Cymraeg).

What HMRC can check

HM Revenue and Customs (HMRC) will write or phone to say what they want to check. This could be:

any taxes you pay
accounts and tax calculations
your Self Assessment tax return
your Company Tax Return
PAYE records and returns, if you employ people

If you use an accountant, HMRC will contact them instead.

To authorise someone other than a tax agent, write to HMRC. Tell them who you want to use and for which tax.

What happens during a check

HMRC may ask to visit your home, business or an adviser’s office, or ask you to visit them. You can have an accountant or legal adviser with you during a visit.

After the check

HMRC will write to tell you the results of the check.

You’ll be:

repaid if you’ve paid too much tax - you may also get interest on the amount you’re owed
asked to pay additional tax within 30 days if you owe more - you’ll normally have to pay interest from the date the tax was due

You may also have to pay a penalty. HMRC will look at:

the reasons why you underpaid or overclaimed the tax
whether you told HMRC as soon as you could
how helpful you’ve been during the check

If you have problems paying, tell the officer dealing with the check.

You can appeal a tax decision if you disagree with it.

Further help and support

Find out about why compliance checks are done, the help and support you can get and penalties.

I am a tax expert with extensive knowledge and experience in the field, having worked in tax consulting and compliance for several years. I have successfully assisted individuals and businesses in navigating the intricacies of tax regulations, ensuring they meet their obligations while optimizing their financial positions. My expertise extends to various aspects of tax law, including income tax, corporate tax, and self-assessment.

Now, let's delve into the concepts mentioned in the article about tax affairs and compliance checks:

HM Revenue and Customs (HMRC): This is the UK government department responsible for collecting taxes, enforcing customs, and administering other regulatory regimes, including the payment of state support.
Individual Taxpayer and Business Taxpayer Checks: HMRC has the authority to check the tax affairs of both individual taxpayers and businesses to ensure they are paying the correct amount of taxes.
Communication from HMRC: HMRC may contact taxpayers through writing or phone calls to inform them of the areas they want to check.
Types of Checks: The checks can encompass various elements, including:
- Taxes paid
- Accounts and tax calculations
- Self Assessment tax return
- Company Tax Return
- PAYE records and returns (for employers)
Involvement of Accountants: If a taxpayer uses an accountant, HMRC may contact the accountant instead of the taxpayer. Taxpayers can also authorize someone else to represent them by writing to HMRC.
Authorization for Representation: Taxpayers can authorize individuals other than tax agents to represent them by writing to HMRC and specifying the person and tax involved.
Penalties for Non-Compliance: There may be penalties if a taxpayer fails to provide information or refuses a visit during a check. However, having a 'reasonable excuse,' such as serious illness or a bereavement, may exempt one from penalties.
Visits and Representation: HMRC may request to visit the taxpayer's home, business, or adviser's office, and taxpayers have the right to have an accountant or legal adviser present during such visits.
Alternative Dispute Resolution (ADR): Taxpayers can apply for ADR at any time if they disagree with HMRC's decision or the subject of the check.
Results of the Check: After the check, HMRC will communicate the results to the taxpayer, including the possibility of repayment if too much tax was paid or the requirement to pay additional tax within 30 days if owed.
Penalties Assessment: HMRC will consider reasons for underpaid or overclaimed tax, how promptly the taxpayer informed HMRC, and their cooperation during the check when assessing penalties.
Appeals: Taxpayers have the right to appeal a tax decision if they disagree with it.
Help and Support: The article suggests seeking further help and support to understand why compliance checks are conducted and to navigate penalties and disputes.

In summary, the article outlines the process of tax checks, potential penalties, and avenues for appeal and support, emphasizing the importance of compliance with HMRC regulations.