It is a known fact that many a times and almost mostly the business men are always in a position to be audited by the tax department from time to time. But one needs to understand that exactly when these are in the most serious of their modes or when these are just like a routine check. One can be very much assured though that if the income tax department or the HM Revenue and Customs actually suspects one of inaccurate tax returns then their visit can be more than just serious. This article will help one in realizing that what are the ways that these tax investigations are done and what re the ways that one can remain grounded at the moment?
Procedure Of The Tax Investigation:
This is an extremely professional matter and is something that involves the law in it. One should know that the HM Revenue and Customs take this matter very seriously. The investigation, if is serious is because the department has decided to believe that there are high possible chances that there had been great discrepancies between the tax that was announced and the tax that was actually due.
One should know that some of these investigations are generally because there has been a breach of the process. This is the exact reason why in these investigations one will find a detailed examination of a very particular tax return or a specific item. Whereas there can be also be investigations on the entire business assets and tax affairs of a particular individual.
What All Can The HMRC Investigate?
The following points are the point that one must remember that the HMRC can investigate about. In that case one needs to be ready with the necessary documents and the answer that will be actually suitable for the situation.
- They have the power so that they can inspect all the necessary business documents, assets and that too in the same business premises where they feel it is necessary. They can also check the owner’s tax positions and that of the business premise’s too.
- They also have the power enough to ask for a record that actually belongs to a twenty year old file.
- They are eligible to visit unexpectedly and can demand any third party to provide the necessary documents and all the information regarding the tax payer.
What should One Do In These Situations?
One should be clever enough to realize that the law is with them and doing anything non smart can turn the entire things against them. The following points are the exact things that one should do under a circumstance of unexpected tax investigation:
They should keep calm under any condition and at least avoid the best possibilities of lying to HRMC. The worse possible mistake that they should avoid under this condition is thinking that the HRMC may be missing on some information, because if they have come, they have come prepared.
One can call the hm revenue number if they have any kind of query about them that needs to be answered.