Are you exposing yourself?!
“It could be you!” – are you covered against the tax investigation lottery?
Have you ever been subjected to a tax investigation?
Just the thought gives me the horrors.
The nearest I came to it was when HMRC’s team got in touch with some questions about my VAT returns.
Of course, it happened at the worst possible time.
I was working ridiculously long hours to meet a series of deadlines. I desperately needed to kick-start my cashflow. My family were beginning to wonder what I looked like.
And then came a letter from HMRC asking questions that I couldn’t answer. At the time I relied on a freelance bookkeeper to keep my accounts in order. Naturally, she had just gone on holiday.
So I sweated for hours I couldn’t really spare, trying to make sense of the questions and to provide the right answers. In the end I rang up the relevant contact in the VAT team to tell her what I could and to beg her to wait until my bookkeeper had finished sunning herself in Spain, or wherever she went to.
My suggestion seemed to be acceptable. But when my bookkeeper came back, I had to pay her to spend hours getting all the missing information together. In the end it turned out she had made some minor error in calculating my VAT, so I ended up with a nasty bill too. I also learned the hard way that there’s a big benefit in using a proper accountancy firm like THP – if your usual contact is on holiday, there’ll always be someone else who can help.
If a non-formal investigation can be so expensive and time consuming, just imagine what could happen if the taxman decides to properly delve into your accounts. It’s more likely than you think – so many tax enquiries are conducted entirely at random. Just like when you play the National Lottery…. ‘It could be you’ ..
Except a tax investigation is a lot more likely!
What can HMRC investigate?
If the taxman decides to put your business or personal accounts under the microscope, there’s little you can do about it. Whether it’s self-assessment, VAT, PAYE, NIC, CIS, IHT or even a charity’s Gift Aid scheme, HMRC has powers to go fully forensic on your accounts.
You might be hit by a full enquiry, which considers all aspects of your self-assessment tax return, or an aspect enquiry which delves into certain elements of it. You could be landed with a Business Inspection Notice, when you find yourself on the end of a short-notice or unannounced visit by a team of HMRC people intent on inspecting your goods, premises and documents. Perhaps you’ll only have to deal with a ‘routine’ PAYE/VAT/CIS compliance visit – which, while being routine for the taxman, is an expensive and time-consuming hassle for you.
There are lots of other ways HMRC can delve into your tax affairs, and you can find more details of them in our brochure: Protect yourself with our Tax Investigation Service. But the bottom line is this – unless you have cover in place, any kind of investigation will be a financial and logistical setback for your business.
Don’t expose yourself!
This is where THP can help you. Our Tax Investigation Fee Protection Service covers you when the taxman comes knocking. Not only does it cover all of our professional fees (up to £100,000, depending on the type of investigation or probe) but it entitles you to our expert advice and guidance every step of the way.
Best of all, it doesn’t just cover you for formal investigations. If the taxman makes any routine enquiries about your self-assessment tax return, we’ll take care of those too (up to an indemnity of £2,000).
It may be impossible to keep HMRC from scrutinising your tax affairs but you can certainly protect yourself against the damage of any potential investigation. That’s why clients who value peace of mind turn to our Tax Investigation Fee Protection Service – and you can benefit from it too.
To learn more about the service and what the tax investigation lottery could mean for your business or if you have any queries, drop us a line today – before the taxman comes knocking! With offices in Chelmsford, Cheam, Wanstead, Saffron Walden and London City.