Tax Investigation & Insurance
HMRC has full authority to check your affairs at any point to make sure all kind of tax payers paying the right amount of tax. HMRC could randomly select any businesses (such as Self-employed Individuals, sole traders, partnerships, limited company, LLP and PLC) for investigation.HMRC Tax Investigations can be very stressful and time consuming. Relax tax endeavor to resolve the tax investigation in the most efficient and effective manner. Tax Investigation Insurance is a package that covers you and your business of an accountancy fees that result from an investigation by HMRC.
There are three different levels of investigation that HMRC can carry out
-Full investigation
-Aspect investigation
-Random investigation
What triggers HMRC for the tax investigation.
-If the VAT claim has been increased significantly in compare to previous quarters
– If the significant fall in sales compared to past returns
-Significant increase in expenses or costs are above the industry average
– Returns and filing are late in regular basis
– If the business involved in more cash basis
– Figures in the returns does not make sense and incorrectly submitted.
What kind if investigation
There are various kind of inspection carried out by HMRC which includes
-PAYE (Pay as you earn) and CIS (construction Industry Scheme)
– Self assessment/ Income tax
– VAT (Value Added Tax)
– Corporation tax
-IR35
What happens once HMRC have decided to investigate
When HMRC open the investigation , tax payer has an obligation to provide all the information they ask. During the investigation HMRC inspector will thoroughly examinerecords, transactions and accounts and asking questions they believe necessary.