WhatAbout a compliance check ischecks

A compliance check (sometimes known as a ‘tax enquiry’) is when HMRC checks your tax position. We carry out compliance checks to:

• make sure you’re paying the right amount of tax at the right time
• make sure you’re getting the right allowances and tax reliefs
• discourage tax evasion
• make sure the tax system is operating fairly

WhyGet weauthorisation mightfor startyour atax complianceagent checkto deal with checks

WeIf haveyou thewant rightyour tax agent or advisor to deal with us on your behalf, they must have formal agent authorisation. We’ll deal with them during the check whetherif anythey taxalready returnhave isformal accurateauthorisation.

If andthey complete.do However,not certainhave formal authorisation, you must arrange temporary authorisation on their behalf so they can deal with your compliance checks.

If you’re an agent

Apply for formal agent authorisation or arrange temporary authorisation for your client.

Why HMRC carries out checks

Certain things may prompt us to startopen a compliance check into your tax affairs. ForThese example,could if you:include:

• enterentering figures on a tax return that seemappear to be wrong
• makemaking a large claim for a large VAT refund when your turnover is low
• declaredeclaring a small amount of tax when your turnover is high

How compliance checks work

We’llWe will call or write to youyou, toand tellyour tax agent if you have one, to say what we want to check and why. We’llIf alsoyou writethink towe yourshould authorisedstop taxthe agent,check, if you haveshould one.tell us why.

If we’vewe have started a check, you should continue to file your tax returns and pay anyyour taxes if they’re due.

Watch a video about how compliance checks work

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• are being treated in hospital

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If you needthink morethe time,request tellis us.unreasonable We may agree to this if there’s a valid reason. For example, if you’re seriously ill, or someonenot closerelevant to youthe hascheck, died.

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Outcomes of the compliance checkchecks

If the check shows there’sthere is nothing wrong, we’ll endbring it as quickly asto possible.an end. If you’veour overpaidchecks tax,show we’llyou repayhave thisoverpaid totax, you alongwill be repaid with any interest due.

due added. If you’veyou have underpaid tax, you’llyou will need to repay this. We’llYou chargewill yoube charged interest and you may alsoreceive charge you a penalty.

We may issue aan tax assessment or amend your tax return to collect any unpaid tax.

You can apply for Alternative Dispute Resolution (ADR) if you do not agree with HMRC’s decision or with what we’re checking at any time during the checks.

If we decide that you owe us tax after we carry out the checks and you cannot afford to pay it immediately, you can contacttalk to us about payment arrangements. that you can afford.

Watch a video about help if you cannot pay your tax bill

Watch a video about help if you cannot pay your tax bill.

Penalties

WeYou may chargebe youcharged a penalty if we find something wrong during the check.

We’ll consider how much you cooperated with us when deciding if we can reduce athe penalty. In general, the more help you give, the lower the penalty will be.

Find out howwhat you can do to reduce any penalty we may charge.

If you’re an agent, find out more about penalties.

Watch a video about why we charge penalties and what you can do about them

Watch aour video on penalties and what you can do about them.

Criminal investigation

It’s HMRCHMRC’s policy to deal with fraud using civil investigation procedures, wherever we can.appropriate.

However,We wereserve can also conduct a criminal investigation. Wefor mightcases dowhere this if:

• we need to send a strong deterrent message
• or where the conduct involved meansis such that only a criminal chargesanction is suitable

appropriate.

Find out more about our criminal investigation policy.

If you disagree with ourthe decisionoutcome of the check

If we make a decision you can appeal against, we’ll write to you.you Ourabout letterthe willdecision and tell you what to do if you disagree with the decision.disagree.

You’llYou will usually have 3 options. Within 30 days, you can:

• send new information to the officer dealing with the check and ask them to take it into account
• have your case reviewed by aan different officer who has not been involved in the matter
• appealarrange tofor an independent tribunal to hear your appeal and decide the matter

Watch a video about what to do if you disagree with an HMRC decision

Watch a video about what to do if you disagree with an HMRC decision

ResolveWatch videos about resolving a dispute with HMRC

YouWatch canYouTube applyvideos forabout alternativethe different ways to resolve a dispute resolutionwith HMRC.

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• using the differentAlternative waysDispute Resolution (ADR) process to resolve a dispute with HMRC.