HMRC can be ruthless
An article in the Telegraph this month caught my eye.
Imagine being out on the road and getting a call from your office telling you that 20 officers from HMRC had turned up at your business premises. How would you feel if you found them changing the locks, going through documents and packing up computers to take away?
That’s what happened to Mr Hone who was a director of a small business. Not only that but when he arrived at the office he was told he was sacked and his personal bank accounts had been frozen.
How did this happen?
Well, basically HMRC thought the business was avoiding tax so it applied for an “ex-parte” hearing with a Judge. This is a hearing without the defendant on the basis that if they were notified they would cover up the wrong-doing.
The judge agreed to a liquidation order which meant a liquidator (appointed by HMRC) basically took over the company.
As it turns out, on review, the original judge didn’t even have time to check the evidence.
There is no doubt HMRC can be ruthless.
Two months before the review judge reached his decision that there was no evidence of any wrong doing, all the directors were sent a letter reminding them that they were “bound to lose all of their assets and are all likely to go bankrupt”, and that there would be actions against their “family members who have profited”.
Sackmans (Accountants for North London) recommend business owners protect themselves from the dangers of a Tax Investigation by investing in a tax protection service and assurance. This will give you professional representation if you are investigated and the assurance of good financial administration, bookkeeping and management.