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HMRC internal manual

Compliance Handbook

Information & Inspection Powers: Conditions and safeguards: What we can require or inspect: Checks

A check includes carrying out an investigation or enquiry of any kind.

Types of checks can range from a short telephone call to confirm a simple fact to a full and detailed investigation of a person’s entire financial affairs over a period of years.

If a time limit has expired so that neither the person nor HMRC can change a particular tax position, see CH21540, even if they wanted to, it will not be reasonable to carry out a check of that particular tax position. In order to check by reference to extended time limits for careless or deliberate behaviour it will be necessary to have reasons to suspect that such behaviour has occurred. You will find guidance about behaviour and extended time limits for assessing in CH50000 onwards.

HMRC must use its resources to best effect in meeting its responsibility to collect the right amount of tax from the right people at the right time. Compliance checks should be made in a timely and proportionate way to ensure that a person’s tax position is correct.

Where a check identifies an error or shortcoming it is important to help the person identify improvements that can be made. This will hopefully reduce the risk of errors in future returns and reduce the need for further checks to be made on that person’s tax position.

However, where we have checked a person’s tax position it may still be reasonable to carry out a further check at a later date. For example, we may identify another risk (including another risk in an area previously checked) if we later obtain information that conflicts with the information that was available during the previous check.

Note that if your compliance check is into an excise duty, you will use powers under CEMA79. See guidance in the Enforcement Handbook.