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HMRC TAX ENQUIRY

Simple Guide to HMRC Tax Enquiries: How Filing Accounts Can Help You

Tax matters can be confusing, and if you ever receive a letter from HMRC (Her Majesty’s Revenue & Customs) about a tax enquiry, it can feel overwhelming. But don’t worry! At Filing Accounts, we specialize in helping individuals and businesses understand and handle tax enquiries so that you don’t have to go through the process alone. In this easy-to-understand guide, we’ll break down what tax enquiries are, why HMRC conducts them, the different types of enquiries, the steps involved, and how we can help you every step of the way.

Who is HMRC?

HMRC (Her Majesty’s Revenue & Customs) is the UK government department responsible for collecting taxes. They ensure that individuals and businesses pay the right amount of tax, and they also handle National Insurance, VAT, and other tax-related matters.

What is a Tax Enquiry?

A tax enquiry is when HMRC checks your tax return to make sure everything is correct. They may want to see extra documents, bank statements, or other records to confirm your income and expenses. HMRC carries out these checks to make sure everyone is paying .

Why Does HMRC Investigate Tax Returns?

Mistakes or Errors

If there are inconsistencies or missing information in your tax return, HMRC may want to investigate further.

Large Tax Refunds

If you claim a large refund, HMRC may check that it is accurate.

Unusual Claims

If your expenses or deductions seem unusually high, HMRC may want to verify them.

Late Submissions

If you often file your tax returns late, HMRC may take a closer look.

Random Checks

Some enquiries are completely random and have nothing to do with suspicion.

Types of Tax Enquiries

There are three main types of tax enquiries that HMRC may carry out:

1. Full Enquiry

A full enquiry is a detailed investigation where HMRC examines your entire tax return. This usually happens when HMRC believes that there is a significant issue with your tax filings.

What HMRC may check in a full enquiry:

  • All your income sources (employment, self-employment, investments, etc.)
  • Business records, invoices, receipts, and bank statements
  • Property income (if you are a landlord)
  • Expenses and deductions you have claimed

Why you might receive a full enquiry:

  • Your reported income doesn’t match the records HMRC
  • Large fluctuations in income that don’t seem to make sense
  • Repeated errors or suspicious claims on past tax returns

2. Aspect Enquiry

An aspect enquiry is when HMRC only checks one or two specific parts of your tax return. It’s not as serious as a full enquiry, but it still needs to be handled carefully.

Examples of aspect enquiries:

  • If HMRC wants to check a particular expense claim that looks too high
  • If your business has reported unusually low profits compared to industry standards
  • If you claim tax reliefs that seem incorrect

3. Random Enquiry

Sometimes, HMRC selects tax returns at random for an enquiry. This doesn’t mean you’ve done anything wrong – they do it as part of their routine checks to make sure the tax system is working properly.

What Happens During a Tax Enquiry?

If you receive a tax enquiry letter, here’s what typically happens:

Step 1: You Receive a Letter from HMRC

HMRC will send you an official letter explaining that they are investigating your tax return. The letter will mention whether it’s a full enquiry, an aspect enquiry, or a random check.

Step 2: HMRC Requests Information

HMRC will ask you to provide certain documents. This could include:

  1. Bank statements
  2. Invoices and receipts
  3. Contracts and payslips
  4. Property rental agreements (if you’re a landlord)

Step 3: You Respond to HMRC

You need to provide the requested information within the deadline given in the letter. If you don’t reply, HMRC may assume you’re hiding something, which can lead to penalties.

Step 4: HMRC Reviews the Information

HMRC will go through the documents you’ve provided. They might:

  1. Accept your tax return as correct and close the enquiry
  2. Suggest changes to your tax return and ask you to pay more tax
  3. Issue penalties if they find that you have underpaid on purpose

Step 5: Resolution and Outcome

Once the enquiry is complete, HMRC will send you a letter with their decision. If you owe extra tax, they will tell you how much you need to pay and by when. If you disagree, you can appeal their decision.

How Filing Accounts Can Help You

At Filing Accounts, we understand that receiving a tax enquiry letter can be stressful. That’s why we offer professional support to guide you through the process. Here’s how we can help:

We Deal with HMRC for You

We will communicate with HMRC on your behalf, ensuring that all responses are accurate and properly prepared.properly prepared.

We Gather and Organize Your Documents

We will help you collect all the necessary records and present them in a way that satisfies HMRC’s requirements.

We Ensure Your Tax Return is Accurate

We check your tax return carefully to spot and fix any mistakes before HMRC does.

We Negotiate on Your Behalf

If HMRC claims you owe more tax, we can negotiate to minimize any additional payments and prevent penalties.

We Offer Ongoing Tax Advice

Even after the enquiry is finished, we can help you stay compliant with tax laws to avoid future problems.

How to Avoid a Tax Enquiry in the Future

While you can’t completely prevent a random enquiry, you can take steps to reduce the chances of being investigated:

  •  File Your Tax Return on Time: Late submissions increase the likelihood of an enquiry.
  • Keep Clear and Accurate Records: Always keep copies of receipts, invoices, and bank
    statements.
  • Be Honest on Your Tax Return: Don’t try to claim expenses or deductions that you
    can’t prove.
  • Seek Professional Help: Having a tax expert review your return before you submit it
    can prevent mistakes that might trigger an enquiry.

Final Thoughts

A tax enquiry can seem intimidating, but with the right help, it can be managed smoothly. At Filing Accounts, we’re here to make sure you understand the process, respond correctly, and achieve the best outcome.

If you’ve received a tax enquiry letter from HMRC or have any concerns about your tax return, don’t hesitate to reach out to us.

Contact Filing Accounts Today! For expert tax enquiry support, visit our website at
www.filingaccounts.co.uk or call us at 0207 193 8157. Or email us on info@filingaccounts.co.uk

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