A new framework for compliance checks was introduced by HMRC on 1 April 2009.  Assurance visits have always been a feature of VAT and the Inland Revenue had the power to visit employers to check on the operation of PAYE.  The inspection powers supporting both were inherited by HMRC after the merger of the Inland Revenue and HM Customs.  Under the new compliance framework, HMRC will have a new power to visit business premises to carry out compliance checks not just for VAT and PAYE but for the purposes of other direct taxes.

The new framework applies to compliance checks for:

  • Income tax
  • Capital gains tax
  • VAT
  • PAYE
  • The Construction Industry Scheme
  • Corporation tax

 

HMRC’s inspection powers will be supported by new information powers and there are new provisions relating to record keeping and time-limits for assessments and claims.

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More Information

Records

One of the aims of compliance checks is to improve record keeping, which HMRC consider to be a primary cause of incorrect tax returns.  The checks…

Information Powers

The information powers in Finance Act 2008, Sch. 36 give HMRC the right to request information that is reasonably required for checking a person’s tax position.…

Inspection Powers - Compliance Checks

Inspection Powers Finance Act 2008, Sch. 36 contains inspection powers that enable HMRC to inspect business premises, business assets and statutory records.  Such inspections form an…

Compliance Checks Penalties

Penalties Various penalties may be chargeable in the course of or at the end of a compliance check, either for failures to comply with information and…

Time-Limits for Claims and Assessments

Time-limits for assessments and claims have been aligned as part of HMRC’s review of its powers. The new time-limits are fully operational from 1st April 2009.…

Finishing a Compliance Check

The officer will bring the compliance check to a close once all the risks that have been identified, either before or during the check, have been…

Compliance Checks Legislation

Legislation   The legislative framework for compliance checks, which is contained in Finance Act 2008, provides for   Inspection powers­ Sch. 36   Information powers –…

What is a Compliance Check?

What is a Compliance Check?   HMRC carry out compliance checks to make sure that taxpayers are complying with their obligations, paying the right amount of…

Taxpayer Safeguards

There are safeguards for the taxpayer provided as part of the new framework for compliance checks which are intended to ensure that: The powers are used…

Transitional Matters

After 1 April 2009 HMRC officers must only use the new information and inspection powers included in Finance Act 2008, even if they are continuing an…

Compliance Checks Selection

Selection Most compliance checks will be: Income tax or corporation tax self-assessment enquiries VAT assurance visits Employer compliance reviews Light touch interventions aimed at correcting minor…

Pre-Return Checks

HMRC’s compliance checking powers enable them to carry out examinations of contemporary business records to check that they are adequate and comply with the statutory record-keeping…

Errors Found During Compliance Check

Errors Found The way in which any errors found in the course of a pre-return check will be dealt with depends on whether or not the…

Interaction with Enquiries

The officer will always have to consider whether or not it is appropriate to open a formal enquiry before starting a compliance check. If the compliance…
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