No business owner loves to be the subject of a routine tax audit or investigation by His Majesty's Revenue and Customs (HMRC). But there are some steps that, if followed, will reduce the possibility of an audit or investigation. Here are five key actions to take:

1. Keep accurate and up-to-date financial records

One of the most significant things you can do to minimise the chances of an audit or investigation is to keep accurate and up-to-date financial records.

This means having a record of all your income and expenses and any assets and liabilities. HMRC can request these records any time, so it's important to have them readily available.

2. Pay your Business taxes on time every time

Another step that will help avoid an audit or investigation is paying all your taxes on time. This means paying the correct amount of tax and filing your tax returns on time. HMRC can measure penalties for late tax payments or filings, so punctuality is important.

3. Declare all your income and assets to HMRC

It's also important to declare all your income and assets to HMRC. Why? Because HMRC may query why you have not declared particular income or assets, which could lead to an audit or investigation.

This includes income from self-employment, employment, property, investments, or other sources. You should also declare assets such as property, vehicles, or savings.

4. Cooperate with any HMRC investigations

However, if after taking all the routine steps above, you are the subject of an audit or investigation by HMRC, it's very important to collaborate with them. This means providing any requested records or information on time. It's also important to be honest and forthcoming with information. Lying or withholding information from HMRC will only make the situation worse.

5. Get professional help if you're unsure about anything tax-related

If you are ever unsure about anything tax-related, it's best to get professional advice. This could be from an accountant, tax lawyer, or other tax professional. They can help confirm you take all the necessary steps to avoid an audit or investigation.

When it comes to taxes, consider hiring an accountant to review your tax returns and submit your tax paperwork. This minimise the risk of any mistakes or late filing and meaningfully reduces your chances of being investigated.

Note: Unless you are 100% sure of your position, you should take professional advice as soon as a tax investigation or inspection starts.

Minimise the likelihood of an investigation

By taking the routine practices above, you can help avoid an audit or investigation by HMRC. But remember that if HMRC ever contacts you for an audit or investigation, it's vital to cooperate and get professional help.

Talk to us on how to avoid a tax investigation.