Danielle Ford runs the rule over HMRC’s compliance risk review process.
HMRC has always carried out a large volume of compliance activity through enquiries and interventions each year, which have historically been either random or information led. Now, with the array of sources and the huge volume of information HMRC possesses, random enquiries are becoming a thing of the past.
Settlement of enquiries and HMRC’s handling of enquiries is never far from the press, but something less talked about is the review work and analysis HMRC undertakes before an enquiry is commenced.
Much of HMRC’s analysis is centralised within the Risk & Intelligence Service (RIS) department who have access to all data and information which lead to an enquiry. This information is used to assess the tax risks or areas of concern for all taxpayers.
RIS usually undertake an analysis of a particular taxpayer under three circumstances:
- An aspect of their tax affairs has raised a flag on HMRC’s various systems.
- Intelligence has been received.
- The taxpayer fits within a category of taxpayer for which HMRC has an active compliance campaign (for example Chinese takeaways).
In some cases, individual HMRC officers may have identified a risk themselves and requested a risk review be undertaken – this is a practice used within the Fraud Investigation Service (FIS).
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