HMRC will occasionally carry out checks on your self-assessment tax return to ensure that you are completing it correctly and the correct amount of tax is paid in a timely manner. These checks are usually random and don’t automatically mean that you have done anything wrong. More information may be requested by HMRC to provide an explanation for figures entered on the tax return. Mistakes made when entering the information need to be reported to HMRC as soon as possible so that the correct amount of tax is paid, even if you are already subject to a tax return check.
How do you know that your tax returns are being checked?
HMRC will inform you of the check in writing, telling you what is being checked, what information they require from you and when it has to be provided by. You will normally be notified of the intention to check your tax return within a year of submitting it to HMRC. However, if you have deliberately provided misleading information, submitted the tax return late or if any figures have been changed, HMRC may have a longer time period to make checks. If you have an agent or an advisor representing you, HMRC will notify them of the tax return check at the same time as writing to you. A form 64-8 has to be completed and submitted to HMRC to give it authority to deal with your agent on your behalf.
What information will you have to provide?
You will be informed in writing or by telephone of what information is required by HMRC during the tax return check. If you keep accurate records, you will have the information ready for HMRC. If you have an accountant or agent who completes your tax return, then it will be down to them to have records at the ready.
How long do you have to provide the information?
If you are unable to provide the information required by HMRC, you should contact it immediately with an explanation. You will be given a period of time considered reasonable by HMRC to provide the information.
When the check is completed
If everything is found to be fine with the tax return, nothing else will happen and you will be notified of this in writing by HMRC. If you have overpaid your tax, you will be given a refund accordingly. If you owe any tax, you will have to pay the amount owed plus any penalties charged by HMRC. Penalties will depend on the reason for not paying the correct amount of tax.
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