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HMRC claims compliance checks are usually triggered when figures submitted on a return appear to be wrong in someway. If a small company suddenly makes a large claim for VAT, or a business with a large turnover declares a very small amount of tax, this will likely be flagged-up by HMRC.
However, there are some other things that experience has told us may make a business become the target of an investigation:
•    HMRC receives a tip-off
•    You work in a high-risk industry, for example one that routinely takes cash     payments
•    You have a large fall in income, increase in costs or there are inconsistencies between different returns
•    You file your returns consistently late
•    Your costs are above the industry norm
•    Your tax returns are inconsistent with your standard of living
•    You are in a sector that HMRC has decided to target.

What business taxes does HMRC investigate?

•    Many different types of business taxes can be investigated, it is not – as many seem to think – limited to income tax. Other areas of taxation that can be investigated are as follows:
•    Insurance premium tax
•    Landfill tax
•    Capital gains tax
•    Climate change levy
•    Construction industry scheme

What types of investigation are there?

•    Corporation tax
•    VAT
•    There are three different levels of HMRC enquiry; full, aspect and random.
•    During a full enquiry, HMRC concerns itself with cases where it believes there is a significant risk of error in the tax return. In this type of enquiry, a review of all records will be undertaken. This can include personal financial records of Directors/Business owners as well as business records.
•    If a business is subject to an aspect enquiry, then HMRC are concerned about a particular part (or parts) of your accounts and wants more detail. Generally, the outcome points to a genuine mistake or misunderstanding rather than deliberate attempts to evade tax. This type of enquiry shouldn’t be taken lightly, and should be treated just as seriously as a full investigation.
The third type of enquiry is purely random. HMRC simply picks a selection of businesses completely at random to investigate.

Why DAX?

All types of tax investigations are handled at DAX. Our expert chartered accountants offer competent advice on subjects such as COP 8 (Tax Avoidance), COP 9 (Suspected Serious Fraud), HMRC Nudge Letter, disclosure facilities, fraud, VAT and PAYE investigations. 
We realize how essential it is to manage HMRC investigation issues calmly and to go through the entire procedure of submitting a reply on time, along with all required documents, when HMRC initiates a tax investigation on a person or corporation. Due to the rising frequency of HMRC tax investigations putting businesses in danger, we have devised an exclusive consultation to assist you through these serious inquiries that are becoming increasingly common. 
By identifying industry-specific reliefs, simplifying your tax payments, and minimizing fines, our team of tax professionals can support you with HMRC investigations by using their expertise and practical approach. 
DAX ensures that all assessment and penalty issues are effectively addressed by completing all compliance checks pertaining to income tax, corporate tax, self-assessment, PAYE, National Insurance, IR35, VAT and National Minimum Wage. 

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