A guide to preparing your business for a tax investigation


Running a business is challenging enough at the best of times, but when you discover you’re going to be investigated with regards to your tax, it can add additional stress and pressure onto your team. Although sometimes it can be unavoidable when the tax man comes calling, we’ve pulled together some of our top tips to ensure your business doesn’t appear on HMRC’s radar.

What happens during an investigation?

According to British tax laws, HMRC is withing their rights to check your tax affairs at any point to make sure you’re paying tax correctly, keeping and submitting appropriate documentation and following procedureswithin the letter of the law. If you’re business is chosen to be investigated, it’s important to note that it doesn’t necessarily mean that HMRC believe you are doing something wrong. All you need to do is present what your business does and be as transparent as possible.

If you are selected to be investigated, it’s important to understand which type of investigation you will be facing, as there are three levels. It could be a full enquiry in which HMRC will ask to take an overall look of your business records. Secondly, you could be facing an aspect enquiry, where they look into a specific part of your accounts. Thirdly, it could simply be a random check where your company has been selected without triggering any alert or concern.

Employ an experienced advisor

One of the first things you may want to do as a business is looking to hire an experienced advisor. Specialist businesses such have a vast amount of experience in helping organisations to navigate tax investigations. Their team will be able to guide you through the whole process, offering sound advice along the way. There are a number of benefits to employing an experienced advisor when you’re facing a tax investigation – they’ll help the process run as smoothly and effortlessly as possible.

Research and understand your tax obligations

It’s important to understand as a business, what your responsibilities are when it comes to your tax. This is a great way of avoiding an investigation in the future. By keeping all your tax records and documents up-to-date, you’ll be able to give HMRC any information they need when you’re asked, meaning they’re less likely to investigate you further.

Get legal assistance if needed

There are so many things you can do to ensure your organisation doesn’t face scrutiny from the tax office. By keeping everything you need to recorded clearly, filing documents on time and offering up clear information when it’s asked for, you’ll be able to avoid unnecessary investigations. It’s also wise to get assistance if you ever need it, that way you can be kept in the loop and be clued up on everything that’s going on.