HMRC Compliance Checks & Investigations

HMRC Compliance Checks & Investigations

Dealing with an HMRC compliance check or tax investigation can be stressful and time-consuming. At Linx Accounting, we provide expert support to help individuals and businesses across London manage HMRC enquiries with confidence and clarity.

Our experienced team ensures you respond correctly, minimise risks, and protect your financial position throughout the process.

What is an HMRC Compliance Check?

An HMRC compliance check (also known as a tax enquiry or investigation) is when HM Revenue & Customs reviews your tax affairs to ensure you are paying the correct amount of tax and following UK tax regulations.

These checks are a routine part of the UK tax system and do not necessarily mean you have done anything wrong. They are carried out to maintain fairness and accuracy across the tax system

Why Does HMRC Start an Investigation?

HMRC may initiate a compliance check for several reasons, including:

  • Errors or inconsistencies in your tax returns
  • Unusual figures compared to your business activity
  • Large VAT refund claims
  • Discrepancies identified through HMRC data systems
  • Information received from third parties
  • Random selection as part of routine checks

HMRC has the authority to review any taxpayer’s records to ensure compliance with tax laws.

Types of HMRC Investigations

Aspect Enquiry

This focuses on a specific part of your tax return or accounts where HMRC requires clarification.

Full Enquiry

A more detailed investigation where HMRC reviews your entire tax return and financial records.

What Happens During a Compliance Check?

HMRC will usually contact you by letter or phone, outlining what they want to review and why.

During the process, HMRC may:

  • Request financial records and supporting documents
  • Ask questions about your tax returns
  • Arrange meetings or visits to your business premises
  • Review your accounting systems and transactions

It is important to continue submitting tax returns and paying any due taxes during the investigation.

Possible Outcomes of an Investigation

Once the compliance check is complete, HMRC will provide a final decision. Outcomes may include:

  • No further action if everything is correct
  • Tax refund if you have overpaid
  • Additional tax liability if underpayment is identified
  • Penalties and interest charges depending on the circumstances

Cooperation during the process can help reduce potential penalties.

Your VAT responsibilities.

If you’re just starting out, we can help you decide whether you need to be VAT registered from the outset or not. And we will continue to monitor your situation, so that should it become obligatory for you to register for VAT, we can deal with all of the paperwork for you.
In contrast, we will also monitor your position for when we think you are able to and would benefit from deregistering.
Whether a new or existing business, we will also look at the VAT schemes you are eligible for and establish whether you would be better off adopting one or a mixture of them. Some VAT schemes can lead to tax savings and a reduction in bookkeeping responsibilities.We can prepare your VAT return; either from your own bookkeeping records or we can take care of your record keeping and the VAT return. 

Comprehensive VAT Support & Advisory

Beyond just filing returns, we provide complete VAT support tailored to your business needs. From VAT registration and scheme selection to ongoing advice on transactions and compliance, we guide you every step of the way. We help you understand complex VAT rules, avoid costly mistakes, and make informed financial decisions. Our proactive approach ensures that your business remains compliant while benefiting from available VAT efficiencies. With Linx Accounting, you gain a reliable partner who simplifies VAT management and keeps your finances in order.

Register Company

Before paying corporation tax, your company must be registered with HM Revenue and Customs (HMRC).

Notify HMRC

This ensures that HMRC recognizes your business as liable for tax and allows you to operate legally within the UK tax system.

Stay Compliant

We guide you through the complete registration process, making it simple and hassle-free.