HMRC can request accounting records, tax calculations and supporting documents during a compliance check. This may include reports or electronic data exported from your software. There is no standard checklist for every business, so the request should relate to the tax, period and issue under review. The Stockport accountants at U&W can help you understand the scope before you respond.
If the check concerns PAYE, HMRC may request payroll records and returns alongside the figures in your accounts. Your wage reports should agree with payments and PAYE liabilities. Reliable payroll support for Stockport businesses helps keep those records aligned.
Cloud software does not prove that your figures are correct. HMRC may still ask how transactions were entered, whether the bank was reconciled and what evidence supports a claim. Consistent bookkeeping services for businesses make those questions easier to answer.
What could HMRC request?
| Possible request | What it may help HMRC check |
|---|---|
| General ledger or transaction export | Income, expenses and account coding |
| Bank reconciliation reports | Whether the books agree with bank activity |
| Sales and purchase invoices | Evidence supporting transactions |
| VAT reports and workings | VAT rates, adjustments and digital records |
| Journals and audit history | Corrections and unusual postings |
| Payroll reports | PAYE, wages and employer costs |
| Software export files | The underlying electronic records |
HMRC may ask how a figure was created
An inspector may look beyond your profit and loss report. They may want to understand how a figure moved from its original source into a VAT return or tax calculation.
Suppose you run a café. Card sales pass through a payment platform, totals enter a till system and weekly figures are posted into Xero. If the VAT return does not agree with the card receipts, HMRC may ask for till summaries, payment-provider statements and the connecting entries.
That does not automatically suggest wrongdoing. The trail simply needs to make sense. Regular bank reconciliation and frequent bookkeeping updates give you a clearer explanation.
Do you have to provide live software access?
A compliance check does not mean you should immediately give HMRC unrestricted administrator access. HMRC may request printed reports, electronic copies or an inspection. In some cases, it can require an electronic document rather than a paper version.
Read the request carefully. Confirm the period, reports and file format. HMRC says you should raise the issue if you believe a request is not reasonable or relevant.
Before sharing data, keep a backup and check that the export does not include unrelated personal information. Cloud accounting for businesses makes reports easier to produce, but permissions and security still matter.
Review edited entries and automated rules
Bank rules can repeat the same error each month. A director’s personal payment might be coded as an expense, or equipment might be treated as routine supplies.
Review these common Xero mistakes and why accounting software still needs professional judgement. You should be able to explain significant journals, deleted entries, duplicated transactions and late changes.
VAT checks may include digital links
Under Making Tax Digital for VAT, required VAT records must be kept in compatible software. Where information moves between products and remains part of the electronic account, it generally needs to move through a digital link. Copying and pasting is not treated as a digital link.
Use the guide to checking a Xero VAT return and consider moving from spreadsheets to Xero if your process is difficult to follow.
Sole traders and landlords should also review the April 2027 MTD expansion if they will enter Making Tax Digital for Income Tax.
Prepare before sending records
- Read the letter and identify the tax and period.
- Check that the contact is genuinely from HMRC.
- Reconcile bank, VAT and payroll accounts.
- Gather invoices, receipts and statements.
- Export only the information requested.
- Keep a copy of everything supplied.
- Explain known gaps rather than changing records quietly.
- Ask your accountant to review the response.
A management accounts accountant can help identify unusual balances. Corporate tax filing support may be relevant to a Company Tax Return check, while HMRC self assessment help may suit a sole trader, landlord or director.
Keep records for the right period
A limited company normally keeps accounting records for 6 years from the end of the financial year they concern. A self-employed person normally keeps records for at least 5 years after the 31 January submission deadline for the relevant tax year.
The guide to financial records small businesses should keep is a useful starting point. You can also see why messy bookkeeping causes year-end problems and how to keep bookkeeping organised as you grow.
Frequently asked questions
What records can HMRC ask to see?
HMRC may request information and documents reasonably required to check your tax position. These can include accounts, invoices, bank statements, payroll records, VAT workings and relevant electronic data.
Can HMRC look at your accounting software?
HMRC can ask for reports or electronic copies and may inspect business records. A check does not automatically require unrestricted access to your whole live account.
What happens if you ignore an information notice?
A formal information notice is legally binding. Failure to comply can lead to an initial £300 penalty and daily penalties of up to £60. Contact the officer promptly if you need more time or believe the request is too broad.
Get help before you respond
An organised response is usually more useful than sending an unexplained software export. Contact U&W for help reviewing your records, preparing reports and dealing with an HMRC compliance check.
