HMRC Tax Enquiries
We’ve just published an article written by Tom Casagranda which highlights some of the methods used by HMRC to identify people who are avoiding tax.
If you are a tax evader, be warned. If you are an honest taxpaying citizen be thankful that you won’t be targeted.
If you do have a problem with HMRC Enquiries please contact us. Of course, if you want to ensure that your tax affairs are in good order, you can also contact us.
Use your accountant
Your accountant is the person, outside yourself, who knows most about your business – and has an interest in making you more profit. Your accountant also has a wide experience of business. Making better use of your accountant could be the best decision you make.
Obviously I can’t speak for other accountants but we try to get to know, and understand, a client’s business so that we can be constructive in helping them. We aim to be proactive in our dealings with them and welcome feedback and questions. A small business owner knows and understands the business he or she is in intimately. What they generally don’t understand is accounting and finance – and they definitely can’t afford a finance director. This is where a good, proactive, accountant can really help. Regularly discussing your business’s financial position and examining the sales, purchase and expense figures can really focus the mind and help you see more clearly.
If your accountant really is just a “bean counter” and doesn’t take an interest in your business, I suggest you should be looking for a new accountant. If your accountant wants to be proactive and help you – let him. You may be very surprised at just how much your business can improve with professional and experienced help.
New Business start up?
If you’re starting a new business, you have a lot to think about. Often the question of an accountant comes a long way down the list – but really it shouldn’t. Research has consistently shown that existing businesses look on their accountant as their most trusted adviser. By talking to an accountant before taking major steps, costly mistakes can be avoided and information to help improve profitability obtained.
Most accountants have experience across a wide range of industries and business types and can contribute a lot to the initial thoughts about a new venture. We were recently approached by someone who thought they’d spotted a major opportunity. Our knowledge of that market enabled us to point out one substantial, unavoidable, cost which had been missed and more realistic projections prepared. We also demonstrated how some other costs could be reduced because we knew of a cheaper source for a particular service. The business is still going ahead and looks as if it should be successful – but not knowing about the missing cost could have proved very expensive.
My advice is to discuss plans with an accountant at an early stage. Find an accountant who you’re comfortable talking to and who talks in English – not accountants jargon – or, at least, explains what the jargon means. Preferably you want an accountant who doesn’t mind you contacting them – and doesn’t charge you for every phone call.
I will now blow our own trumpet. I may be biased but I think that we are the accountants you are looking for. We have a small, and friendly, team with a great deal of knowledge about different businesses and we aim to be proactive to help you develop your business. You can have a free initial chat about your business – and we won’t specify just 30 minutes or an hour; if you need more time, we’ll spend it – within reason of course. We don’t pretend to be the cheapest because we don’t provide a “cheap” service. Neither are we expensive compared to some of the other accountancy firms. We practice what we preach and keep costs down – no Jags or Porsches to support.
You can contact us via the website. Why not sign up for our Free newsletter?
Accountants aren’t just useful in business start ups. Existing businesses can gain a great deal from regular communication with their accountant. I’ll cover this topic at a later date.
Free Newsletter
We recently launched our Free Newsletter, delivered by email to your inbox, covering tax news and information which we think will be of general interest.
It’s FREE. We won’t bombard you with loads of unwanted mail – just the Newsletter about once a month. You can unsubscribe at any time. You should find some interesting comments and information in the Newsletter. Is there a reason you can think of why you shouldn’t subscribe?
This is the link to the subscription page.
What’s the difference between Tax Avoidance and Tax Evasion?
The quick answer is “Prison”.
Tax Avoidance is perfectly legitimate. You can order your affairs and manage your business in the most tax efficient way to take advantage of rules, regulations, laws and concessions.
Tax Evasion is where you step over the line and deliberately misstate or hide transactions. This is illegal and, in extreme cases, can result in prison.
As accountants we do our utmost to keep our clients’ tax bills as low as possible, or obtain the highest possible refund. What we can’t and won’t do is become involved in anything illegal. Quite frankly, it just isn’t worth it. If it is found out that we have knowingly been complicit in tax evasion, the penalties we face can also include prison.
Maybe you hadn’t realised, because it hasn’t been widely publicised, that all accountants have to be registered and are legally required to disclose anything suspicious on a form called a Suspicious Activity Report (SAR). This has to be done without advising the client, otherwise the accountant is guilty of an offence called “Tipping Off”. Failing to make a report where it can be shown that an accountant knew about the offence is also a criminal offence.
The law has been around for a few years but really became fully operational in December 2007 and registration wasn’t completed until well into 2008. Already many thousands of reports have been submitted. Because of this legislation, confidentiality between accountants and their clients no longer exists in most situations.
Think back on any conversations you have had with your accountant over the past year. Did you say anything incriminating? Is there anything in your books or records which might trigger a suspicion?
The best advice is not to put your accountant in a position where they feel they have no option but to make a report, otherwise the Tax Inspector may come knocking armed with insider information.
