HMRC Compliance Checks FAQ

Exercise of Powers

13. Are these simply revenue raising powers?

Well, yes but only to the extent that we want people to pay the right tax at the right time. These powers will allow HMRC to work more effectively and reduce the burden on compliant taxpayers whilst tackling those who try not to pay. Most of the powers being introduced already existed for one or other of the taxes and these powers represent a sensible aligned approach to maintaining the tax system.

The powers allow us to try and put people on the right track before they submit an incorrect return, and where things have gone wrong the penalties are reduced for those who help us to put things right. There are no penalties at all for those who make mistakes despite taking reasonable care. And those who fail to take reasonable care can also reduce their penalty to zero.

14. How will I know if staff are using the powers correctly?

A comprehensive training programme is currently underway across HMRC. Staff must successfully complete the learning before they can exercise these powers.

HMRC managers have a crucial role to play in monitoring the use of these powers and helping staff to develop where any shortcomings have been identified.

When staff have been trained, checks will be carried out to monitor and evaluate the use of these powers under the new rules.

Finally, a broad based implementation governance group, with external representation, has been set up to monitor the use of these new powers across HMRC.

15. Can HMRC check across taxes?

Yes, but the new powers only apply to Corporation Tax, Capital Gains Tax, Income Tax and VAT.

16. How do I know what records to keep?

Essentially we give taxpayers the flexibility to keep what they know is needed to complete an accurate return. There are some situations in VAT and PAYE where specific records are required and these are set out in regulations.

The guidance sets out what types of records need to be kept including some which must be maintained in their original form. We have also shared some draft fact sheets on record keeping with our external readership panel and we are taking views on the usefulness of these

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