DPP Business Tax

HMRC Inspections

If you own a limited company, chances are you’ll be familiar with HMRC tax inspections, or VAT inspections, as they are sometimes known. These inspections are a routine part of running your own business, and usually occur once every 4-6 years, providing HMRC don’t suspect you of any wrongdoing in the meantime.

In recent years the government has been striving to recover lost tax revenue, as well as deter businesses from evading tax. It’s possible that your business may be chosen for a random inspection, however, there are some that are inspected by HMRC for different reasons.

What can trigger a HMRC inspection?

Nobody wants a visit from a suspicious tax inspector, but there are various reasons why you could find yourself facing a VAT inspection:

  • Lateness in submitting your tax returns
  • Failing to declare all of your income
  • Big year on year changes in your income / outgoings
  • Inaccurate expense claims
  • Unjustified expense claims

This list is by no means exhaustive. In fact, any unusual activity on your tax return could trigger an HMRC inspection, so keep this in mind.

What is the difference between an ‘aspect’ and a ‘full’ HMRC inspection?

There are two different levels of HMRC inspection – aspect and full. An aspect inspection is used when HMRC want to investigate a certain aspect of your tax return. If they are not satisfied with the results of this, they may choose to begin a full inspection of your company.

What should I do if I’m facing a HMRC tax inspection?

If you’re facing an HMRC tax inspection, our experienced solicitors can offer reliable tax advice based around all aspects of the inspection. If you’re experiencing any tax issues, or have any questions regarding your HMRC tax inspection, we urge you to contact us today.

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