1 in 10 UK small businesses undergoing an HMRC investigation
HMRC confirmed in April this year that one in every ten UK small businesses is currently under investigation for tax that was not paid in the 2015/6 tax year. If you're worried about an HMRC investigation into your business finances, the following tips and information could help:
Good record keeping helps smooth the process of any HMRC investigation
If you keep all the paperwork related to business sales and purchases, retain all bank statements or keep a tally of bank details, and ensure all expenses are covered by relevant receipts, any investigation will be much more smooth and speedy. Ultimately, all these records should be maintained as a matter of course, although some small business owners find it difficult to combine the daily operational requirements of the business with financial obligations.
HMRC run compliance checks on businesses for a number of reasons, including when they feel mistakes have been made on self-assessment forms, VAT returns or corporation tax returns. Types of returns likely to cause investigations would be when businesses declare much smaller profits than usual or unusually large claims for VAT are made. It's typical in these circumstances to come to an agreement with HMRC, but it is possible to ask for any decisions to be reviewed or make an appeal if they are felt to be unfair.
Investigation of business records
When HMRC make the decision to investigate your business records they will initially call you and conduct a brief 10 - 15 minute telephone interview to ascertain your business is meeting all legal obligations. The results of this conversation will dictate if HMRC feels your business is capable of submitting correct tax returns and whether any further action will be taken. They may decide you need a face-to-face visit, if this is the case for your business you can expect the visit to last at least two hours. The results of any investigation may mean your business is liable to pay additional tax and could also face penalty charges.
If you're struggling to meet your legal obligations with regard to business tax, our accountancy practice and tax advisory service in Seaford and Uckfield may provide the solutions required. Get in touch for details. Speak to our Business Services Partner Robert using his contact details below:
Tel: 01825 763366
Business Services Partner
What is your company’s tax strategy for 2019/20?
Does your business have a tax plan or strategy for the coming year? Are you sure that you’re claiming everything available to you and that your business is structured in the most tax efficient way possible? This article will discuss the strategies that you might be able to use to implement the most tax efficient decisions for your business.
Making the most of all of your tax allowances (PODCAST)
Ensuring you are making the most of all of your tax allowances within a fiendishly complex overall tax system is always a challenge. Hence why in our latest podcast, we are talking with Robin Stevenson (Head of Private Clients at Swindells Accounting) about how to make sure you’re maximising all of your available tax allowances in the run up to the end of the 2018/2019 Tax Year.
Self assessment tax returns, what you need to know
We are fast approaching the self assessment tax return deadline. If you are self employed or in receipt of other income or gains, you will need to file a return and pay over your tax liability. This article will discuss who needs to complete and file a self assessment tax return
Sign up to receive our private content
straight to your inbox