HMRC Tax Enquiry

If you receive a letter from HMRC who want to look into your tax affairs, the first thing to do is not panic.

HMRC Tax Enquiry

If you have received a letter from HMRC stating that they want to look into your taxes and see if everything is in order, don’t panic. They may just be looking for clarification, or perhaps might want some documentation that you forgot to include.

For example, you might just be getting a notice because you received a large inheritance last year and they want to make sure that the money is accounted for. Of course, whatever enquiry you might be facing, the team at Lawrence Grant can support you and provide you with communication tools and resources. We’ll even help with recommending the best Tax Fee Protection cover, that will save you from unexpected expenses for defending your HMRC enquiry.

If you have tax questions, let’s have a chat. You can also read on to learn all about HMRC tax enquiries and what they mean for your taxes.

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What is HMRC?

HMRC stands for HM Revenue & Customs, which is the regulating authority for monitoring income and taxes, to ensure that you are paying the correct amount of tax. One of their main responsibilities, is to create enquiries when they identify suspicious behaviour. They should only be asking for documents and information relating to your tax position and that will help them identify that you are doing things correctly.

If you don’t understand the enquiry or you feel that certain documents or information are not necessary, you can feel free to ask the HMRC officer the reasoning behind their request. They should be more than willing to advise you of what they are reviewing or looking for, so that they can get the quickest resolution and move onto the next case.

Of course, like any legal or government authority, HMRC is not perfect or infallible. Therefore, it could be a major benfit for you to hire appropriate assistance to ensure that your taxes are in order and that your finances are not amiss before they show up to do their job.

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What Should I Do First?

The first thing that you need to do, is create a folder that will hold all of the communications between you and HMRC. Make copies of every letter that you get, put the originals in the folder and store the copies in a secondary location. Along with the folder, designate a notebook where you can record information about calls that have been made, including who you spoke to and when. Get receipts for anything that you mail so that you have proof of receipt from HMRC in addition to proof of sending.

If a paper trail can be shown, it will be much easier to get through the enquiry process. Plus, we’ll be able to work more quickly and help you get out from under the watchful eye of HMRC sooner than you could on your own.

Let’s take a look at some commonly asked questions about enquiries, the importance of understanding the accounting process and how the team at Lawrence Grant can help.

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Frequently Asked Questions About HMRC Enquiries

How will I know if HMRC is investigating me?

If HMRC decides to perform an investigation into your tax position, you will receive a notification through the post that will inform you of the tax enquiry. It will provide all of a summary of the area they are investigating, a list of the information they require, who the assigned officer is and a deadline that a response is required by.

How long does it take for HMRC to investigate?

The HMRC investigation process is not a standard timed event. It may only take a few weeks, but it may go on for months if the information is complex or unavailable, if the issues are serious or if HMRC have several enquiries running themselves. The best way to ensure a quick resolution is to have everything in order and have the support of dedicated legal and tax professionals on your side.

What happens if HMRC investigate you?

Do not panic if you are given a letter that HMRC will be performing an enquiry. They will ask you to provide various information or documents that they need and it will also be of benefit to you if you are cooperative.

However, that does not mean that you should agree with them entirely or that you cannot challenge them. If you think they are incorrect or merely abusing their power this is where we can help.

How long does it take HMRC to process self-assessments online?

It takes between five (5) days and four (4) weeks to complete and process an online self-assessment, generally speaking. This depends on several factors, including whether security checks are required, and more. Some assessments may take longer, and this is generally only one part of the tax enquiry process.

What triggers an HMRC investigation?

Several different things could trigger an investigation or tax enquiry from HMRC. An inheritance, for example, could otherwise appear to be a large influx of cash that is unaccounted for and signals a red flag. Perhaps you forgot to include an income statement for your business, and they’ve flagged your personal tax as a result. If anything looks out of order, there may be an enquiry.

An enquiry on an individual who may have similar circumstances to yourself or works in your sector, that uncovers an irregularity may encourage HMRC to look into your affairs.

Some enquiries are random to ensure consistency and quality control for UK income tax processing, so there may be no reason at all except sheer luck of the draw.

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Understanding the Accounting Process

One of the best things that you can do if facing an HMRC enquiry, or if you are worried about one being scheduled, is to learn about the accounting process that takes place and implement proper accounting methods for your business. By enlisting the assistance of the team at Lawrence Grant, you will be able to not only get through the HMRC enquiry more quickly and smoothly, but you will have a better understanding of the process every step of the way.

If you’ve been summoned by HMRC for a tax enquiry, let’s have a chat.

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