How To Prepare Your Business For an HMRC Audit

Who Gets Chosen by HMRC?

HM Revenue and Customs (HMRC) have the right to investigate your business if they so choose, to ensure that your business is compliant and paying the correct amount of tax. Additionally, tax investigations seem to be on the rise, with HMRC spending more time than ever before ensuring compliance within companies. The frustrating part is that simply because you paid your taxes and submitted your returns on time, does not mean that your business will not be chosen. Furthermore, HMRC does not need to disclose a reason to you as to why your business was chosen for audit.

So even if everything on surface value looks in order and all your paperwork is prepared to the T, there is no guarantee of being excluded from the audit. Because of this, it is important to prepare your business as if you will be audited each filing season. This will save you a lot of stress and frustration for your business eventually gets called upon for an audit

What To Expect During an HMRC Audit

First of all, you will receive either an official investigation letter or a phone call from HMRC to inform you that your business has been selected for an audit. During this communication, they will inform you of what they want to take a look at. This could include things such as the tax that you’ve paid and their calculations, your accounts, your company or self assessment tax return, PAYE records if you are an employer or VAT records if you are VAT registered.

There are 3 different types of audits that HMRC conducts, however, they will let you know which one applies to your business. Depending on the nature of your particular investigation, different information will be investigated and analysed.. You will need to be prepared for HMRC to audit your records and even perhaps visit you in person at your home, business or accountant’s office.

The Different Levels of Investigations

The first level of investigation is a full enquiry and the entirety of your businesses records will be investigated. Usually, a full enquiry is expensive and is usually only requested by HMRC when they feel it absolutely necessary. The second level is an aspect enquiry and will pertain to certain areas of your business. Lastly is the random enquiry and can happen at any time, regardless of the state of your accounts.


Generally speaking, your business always needs to manage your paperwork and submissions with an HMRC audit in mind. It is important to note that they can go back into your account as far as 20 years for serious investigation. This just means that you need to start managing your financial department audit-ready, if you aren’t already. Having your paperwork up to date and done correctly will ensure peace of mind for you as a business owner. Don’t put off getting your accounts in order, as you don’t want to be caught off guard by HMRC.

Have The Right Business Accountants in Your Corner

At Spartan Accounting Group, we understand the necessity of keeping accurate and up to date records of your financial department. This is not only to ensure that any potential tax audits will run smoothly, but it also gives you as a business owner valuable insight into your business. Accounting records are a requirement for business, however, they don’t need to be perceived as a burdensome chore when you have the right accountant on your team. Spartan Accounting Group has the best business accountants in London that can help your business to set up healthy bookkeeping habits to ensure that you are always audit-ready!

Get in touch with us today if you would like to find out how the leading small business accountants in London can help your business! Our expert accounting services include tax and VAT returns, annual accounts, bookkeeping and accounting for a wide range of different industries. We look forward to helping you, should you be wondering how to prepare your business for an HMRC audit.

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