Most compliance checks will be:
However, a compliance check should only be carried out either where the taxpayer is included in HMRC’s programme of random selection for enquiry or where a risk has been identified in relation to
HMRC’s Risk and Intelligence Service (RIS) and Large Business Service (LBS) will be central to identifying cases where tax is at risk.
RIS works closely with Local Compliance. They develop campaigns and projects on a national basis. So, for example, when cases such as they enquiry into the deaths of a group of Chinese cockle pickers in Morecombe Bay reveal that there is a significant taxpayer population that poses a substantial risk of tax being lost, they will set up a special project to check compliance amongst that population. Their national campaigns are likely to target taxpayers in a particular business sector where it is suspected that tax evasion is rife.
LBS develop their programme of compliance checks for large businesses by making their own risk assessments based on their knowledge and experience of the large business they deal with.
Although most selections for compliance checks will be made by reference to a risk that needs to be addressed, there will also be some random selections. If a case is selected at random for a compliance check it will be risk assessed in the same way as other cases selected for a compliance check.