The HMRC tax compliance checks aim to discourage tax evasion, but if you have a check carried out on you, what do you need to do?

Since the start of the Covid-19 pandemic, many of us have had to deal with a vast amount of change. From furloughing staff or making them redundant, to ensuring that people are paid accurately and on time, organisations have had to take on new responsibility in some cases, along with maintaining existing responsibilities such as staying on top of tax payments.

If you are suspected of not paying the right amount of tax, the HMRC can carry out a tax compliance check on you, but what is this check and what does it mean for you? Here, we take you through everything you need to know.


What is the purpose of the HMRC tax compliance check?

HMRC 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


When might you need to take part in a tax compliance check?

HMRC might be prompted to open a compliance check into the tax affairs of your organisation if they have reason to believe that you have underpaid tax, if the entering figures on a return appear to be wrong, if you’re making a large claim for a VAT refund when turnover is low, or if you are declaring a small amount of tax when turnover is high.

You can try to stop the HMRC from carrying out a check, but you need to give a valid reason as to why.


What actions do you need to take?

  • Send relevant documents – during the HMRC check, you may be asked to send any information or documents that HMRC may need, or to meet with HMRC in person (optional) to discuss your tax affairs and records
  • Be prepared for a visit from the HMRC – If you have business premises or run your business from home, you should be prepared for HMRC to visit your business to inspect your premises, assets, and records. If you think the request is unreasonable or not relevant to the check, you should let an HMRC officer know
  • Provide HMRC with accurate information – by complying with the HMRC and giving them the information they need, they can carry out the check quickly and the HMRC can reduce the penalty amount you may be charged

If the HMRC checks show you have overpaid tax, you will be repaid with any interest due added. In instances where you have underpaid tax, you will need to repay this – you will be charged interest and you may receive a penalty.

What support is available to you?

If you struggle to understand some information related to your tax, or if you disagree with a tax decision, you can get in touch with HMRC.

If you want an accountant or tax advisor to help you, you will need to authorise them first, and you can also get help from charities and other organisations.


Visit the HMRC website for more information on tax compliance checks.