I work as as an accountant for a SME, £5m turnover.
The HMRC wrote to us back in July 2015 regards checking corporation tax for years ended 2014, 2015.
There were various questions in the letter, quite straight forward to answer satisfactorily , they also requested a copy of the company records for the 2 years, which we forwarded in the form of a copy of our SAGE line 50 book keeping records.
We didn't hear anything for a few months, then were informed they wanted to visit our premises for a VAT inspection, and to check records going back for 4 years.
My question is how are they allowed to extend the investigation like this? as far as i'm concerned our records are accurate and correct, they have no basis to extend the enquiry.
VAT returns submitted tie to the records kept on sage and to accounts prepared for corporation tax purposed etc.
We also didn't hear anything further regards assessments raised on the corporation tax check.
I assume they are allowed to do this but we haven't really been given an explanation to why?
also can they decide to request 4 years worth of information from the original 2?
Would it be worth me asking the HMRC for an explanation? or would HMRC misconstrue this as a sign of guilt and dig even further (wasting our time).
The reason i ask is we have a fairly large corporation tax refund pending for 2014, 2015 that the HMRC will not process until the investigation has closed.
And tbh it does feel like a bit of a fishing exercise.