Kirk Rice Blog

What you need to do when your business is faced with a visit from HMRCWritten on September 4, 2026 by Jonathan Swarbrick

Receiving a letter or call from HMRC about a compliance check can be unsettling. For many business owners, the immediate concern is that they have done something wrong. In reality, that is not necessarily the case.

HMRC carries out compliance checks across businesses of all sizes. Sometimes it wants to understand a particular transaction, sometimes it wants to review a VAT return or payroll process, and sometimes it is following up on information that does not match what it was expecting to see.

The important thing is not to panic. Most compliance checks can be dealt with smoothly if you understand what is being asked, keep organised records and seek advice early where appropriate.

Start by understanding the scope of the check

The first thing to do is read HMRC’s correspondence carefully. You need to understand which taxes are being reviewed, which periods are covered and what information HMRC wants to see.

Business owners often ask why they have been selected. HMRC will not generally explain how a particular case was chosen, so it can feel completely random where there is no obvious issue.

In practice, however, a compliance check is unlikely to be entirely random. HMRC will normally have identified something it wants to understand better. That might be an unusual trend in a tax return, information received from another source, an industry-specific risk area or simply something that does not fit the pattern it would normally expect to see.

That does not mean HMRC has already decided that a mistake has been made. The immediate focus should be on understanding the point HMRC is checking and making sure the response is clear and complete.

Do not leave preparation until the last minute

If HMRC has asked for records or wants to arrange a visit, spend some time gathering what it has requested and reviewing it before responding.

This is often where issues are identified. Missing paperwork, incomplete records or transactions that are difficult to explain can usually be dealt with much more effectively if they are spotted before the meeting rather than during it.

It is also worth checking whether HMRC is making an informal request or has issued a formal information or inspection notice. A formal notice should not be ignored and may carry particular obligations or safeguards. If the position is not clear, take advice before responding.

If something does not look right, do not ignore it and hope it will not come up. Take advice early, establish the facts and decide how the issue should be explained to HMRC.

If HMRC wants to visit your business

Not every compliance check involves a visit. Many are handled entirely through correspondence or telephone discussions.

Where a visit is proposed, HMRC will normally contact you in advance to agree a suitable date and explain what it wants to review. HMRC will usually give at least seven days’ notice for a visit arranged by agreement. If the proposed date is not practical, contact the officer promptly and explain why more time is needed.

The word ‘visit’ often sounds more daunting than the reality. In most cases HMRC wants to understand how the business operates, review relevant records and ask questions about specific areas. Depending on the nature of the check, the officer may also want to look at business assets, stock or premises, or speak to the people responsible for keeping the records up to date.

The best preparation is usually quite simple:

• Make sure the requested records are available and have been reviewed.
• Ensure the relevant people are available if HMRC has questions.
• Agree who will manage the discussion and answer questions.
• Keep a note of the questions asked, explanations given and documents provided.
• Answer questions openly and accurately, but ask for clarification if the request is unclear.

Most visits are arranged in advance, although HMRC can use formal inspection powers and, in some circumstances, make an unannounced visit. If that happens, ask the officers to explain the basis and scope of the visit and contact your adviser as soon as possible.

Keep things in perspective

One of the biggest mistakes businesses make is assuming that every compliance check will lead to additional tax, penalties or a lengthy dispute.

In many cases HMRC concludes its review and confirms that no further action is required. In others, it may ask for further information, suggest improvements to record keeping or identify an adjustment that needs to be made.

Even where HMRC identifies an error, a penalty is not automatic. The outcome will depend on the facts, including why the error arose and how the business deals with it. Certain penalties for careless inaccuracies can be suspended where HMRC is able to agree suitable conditions designed to prevent a similar error arising again. This will not be available in every case.

Responding promptly and dealing openly with any issues will generally put the business in a better position than delaying matters or providing incomplete explanations.

Get support early

Many clients tell us that the uncertainty is often worse than the compliance check itself.

Having somebody who understands the process can make a real difference. An adviser can help you establish exactly what HMRC is asking for, review the information before it is submitted, identify points that may need explanation and deal with correspondence or meetings on your behalf where appropriate.

Just as importantly, you have somebody to discuss concerns with before they become bigger issues.

How Kirk Rice can help

If you have been contacted by HMRC about a compliance check, our tax team can help you understand what is being asked, review the information HMRC has requested and support you throughout the process.

An HMRC compliance check does not automatically mean something is wrong. With good preparation, clear communication and the right advice, most checks can be dealt with efficiently and with as little disruption as possible to your business.

Contact us today at info@kirkrice.co.uk or via our online form: https://www.kirkrice.co.uk/contact/

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Please note: This article is correct at the time of publication and subsequent changes in law and regulations may not be reflected.  Answers are given for general guidance only and you should take specific advice before acting on any of the suggestions made.