HMRC compliance checks
New inspection, information on record-keeping powers and taxpayer obligations came into effect on 1 April 2009. The term ‘compliance checks’ includes HMRC checks that may have previously been known by other terms such as enquiries, investigations, employer compliance reviews and VAT assurance visits.
These new compliance checks affect all the main taxes including VAT and are intended to operate consistently across the UK tax system.
HMRC have published a series of questions and answers that explain many related issues including why things have changed, their new information powers, who has to authorise these, the new time limits and new record keeping obligations for taxpayers.
It is especially worth noting the effect of the new time limits for assessing (or charging) tax.
|Tax||Ordinary time limit||Tax lost due to careless behaviour||Tax lost due to deliberate behaviour|
|VAT||4 Years||4 Years||20 Years|
|Income Tax and Capital Gains Tax||4 Years||6 Years||20 Years|
|Corporation Tax||4 Years||6 Years||20 Years|
Note that for VAT there are transitional arrangements in place which allow for a shortened assessment period during the first year of the new rules.