White Collar Consultants Limited

So much more than tax

01952 780 220

accounts@wcc-ltd.co.uk

DEALING WITH A TAX INVESTIGATION

16/02/2016
  • According to HMRC 5% of investigations are random, therefore you can never be sure that you have nothing to fear.
    Worst case scenario is you get a letter from HMRC informing you of a “full investigation”. Chances are they will ask for all your business records to be handed over.

    Help

    WHAT IS HMRC ENTITLED TO?

    While they are entitled to inspect your records they cannot insist that you send your records to them. You have the choice as to where your records are inspected. Whilst it may seem convenient to have the taxman perform the inspection at your premises, it could cause additional problems. The official will also get a chance to have a nosey around your premises and this could result in additional questions being asked, therefore this is not advised.

  • Top 6 Tips

    1. Take control
    Speak to them first.
    Ask why there is an enquiry and offer to explain of your business to them. Chances are your company was randomly picked by a performance indicator computer programme. For example your gross profit margins are too low or too high for your industry. Putting forward explanations from the onset for such anomalies could limit the scope of the instigation.
    2. Our place not yours.
    Request all meetings and investigations to take place at your accountant’s offices instead of your own, this will keep the snooping down to a minimum.
    It is also good practice to have your accountant request all correspondence to be in writing and to be addressed to your accountant thereby releasing your pressure levels.
    3. Set boundaries
    Offer half a day to inspect records. More time may be allowed depending on the complexity of the records.
    4. Offer Copies
    Do not allow him carte blanche, request them to mark up all the pages they would like a copies of. Offer to copy and send to him in the post.
    The advantages are:
    i) it has been shown to reduce the amount of copies requested
    ii) you can see what it is that the Taxman has found so interesting.
    5. Data Protection
    Do not offer computer data files freely, offer print outs of the requested information instead? This would barricade them from running your data through their rigorous computer programmes.
    6. Surrender
    If you have to surrender your books do not allow them unlimited access, state that you need the records back to run your business. This will minimise a fishing expedition.
    The message is don’t be the HMRC’s stress ball – TAKE CONTROL!

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