hmrc investigationsAs the competent authority, Her Majesty’s Revenue and Customs (HMRC) may for various reasons decide to investigate various aspects of your business to determine if there have been transgressions of any tax laws or regulations. This may not be as common for individuals and smaller business entities and thus many of you may not know why or how this process occurs.
WHY TAX INVESTIGATIONS START
Mistakes made on your tax returns (regularly) HMRC may receive a tipoff Your yearly numbers may fluctuate above ‘normal’ margins Your business shows unprofitability for several years Your expenses and earnings do not correlate to industry Directors and management earning less than employees You have omitted to report income
These are just some of the reasons an investigation may be initiated, but any activity which may be perceived as suspicious can also place you under tax investigation, such as having any business dealings with companies or businesses which themselves may have been found guilty of tax crimes, or you may just have been randomly selected.