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By The phrase “HMRC tax audit” can make even the most organised business owners nervous — but it doesn’t have to. If your records are accurate and your processes are transparent, there’s nothing to worry about.
At TT Accountancy Services (TTAS), we’ve helped countless businesses across London and the UK successfully navigate HMRC audits. In this guide, we’ll explain what a tax audit is, why HMRC might choose your business, and how to prepare confidently.
What Is an HMRC Tax Audit?
An HMRC tax audit (also known as a compliance check) is when HMRC reviews your business’s financial records to ensure you’re paying the correct amount of tax.
They may check your:
- VAT returns
- PAYE records (for employers)
- Corporation Tax or Self-Assessment filings
- Business expenses and accounting records
Audits can be routine, random, or triggered by irregularities in your tax returns.
Learn more about HMRC compliance checks
Why HMRC Might Audit Your Business
HMRC can open a tax enquiry if they notice:
- Unusual changes in income or expenses
- Frequent errors in tax filings
- Missing or late submissions
- Discrepancies between VAT, PAYE, and income records
- Random selection as part of routine compliance
Being selected doesn’t always mean you’ve done something wrong — but it’s crucial to respond promptly and cooperatively.
How to Prepare for a HMRC Tax Audit
1. Organise Your Financial Records
Make sure all records are accurate and up to date, including:
- Sales and purchase invoices
- Bank statements and receipts
- VAT records and digital submissions
- Payroll and PAYE documents
- Business expense logs
You’re legally required to keep most records for at least 6 years.
Record-keeping rules for businesses – HMRC
2. Review Your Previous Tax Returns
Go through your last few returns to ensure all figures match your records. If you discover an error, it’s better to correct it proactively before HMRC does.
3. Understand What HMRC Wants to See
When HMRC contacts you, they’ll specify:
- Which tax period they’re reviewing
- What documents they need
- How they’ll conduct the audit (in-person, online, or at their office)
Prepare only the information requested, but be ready to clarify or explain any figures if asked.
4. Ensure Digital Compliance (MTD)
If your business is VAT-registered, you must comply with Making Tax Digital (MTD) requirements — keeping and submitting records digitally using approved software.
Failing to do so can raise red flags.
Learn about Making Tax Digital
5. Seek Professional Help
Don’t face an audit alone. A qualified accountant can:
- Communicate directly with HMRC on your behalf
- Review your records for accuracy
- Identify potential compliance issues early
- Represent you during the audit
At TT Accountancy Services, we act as your trusted HMRC liaison, ensuring that your rights are protected and the process runs smoothly.
Common Mistakes Businesses Make During Audits
- Failing to provide requested documents on time
- Giving inconsistent or incomplete information
- Not keeping digital VAT or payroll records
- Trying to handle everything without professional advice
Even honest mistakes can be costly — so preparation and expert support are key.
How TT Accountancy Services Can Help
Our experienced tax team helps small businesses, freelancers, and limited companies stay fully compliant.
We can assist you with:
- Preparing and reviewing financial records
- Communicating with HMRC during audits
- Correcting past tax return errors
- Implementing digital record-keeping systems
- Ongoing tax compliance and advisory support
Contact TT Accountancy Services today to prepare for your HMRC audit with confidence.
An HMRC tax audit doesn’t have to be stressful. With organised records, transparent reporting, and professional guidance, you can pass the process smoothly — and even strengthen your financial controls in the process.
At TT Accountancy Services, we’re here to make HMRC compliance simple and stress-free for your business.
Stay compliant. Stay confident. Partner with TTAS today.
