Archive for the ‘Tax Investigations’ Category
I’ve been warning clients for years about the dangers of a tax investigation and developed a service to protect and support clients.
Many think that the whole point of the Self Assessment tax system (which was introduced in 1997) is to focus more resources on tax investigations. It is common knowledge that the taxman sometimes spys on businesses before it attacks them.
In the old days Tax Inspectors counted the number of people visiting a business and used this information to check the sales. If the bookkeeping didn’t show all the sales for that day then the taxman would argue that this was the case for everyday. The problem is that when the taxman spots a mistake you are on the back foot.
Today the taxman has access to lots of information and they are now spying on people using technology. HMRC’s crawler technology is based upon an elaborate (almost militarised) £45m computer system designed by leading defence contractor BAE Systems. The software is supposed to work by creating ‘spidergrams’ of people’s social media and email habits, then analysing their shapes to determine likelihood of offences.
If you want to make sure you are covered, call me about our Tax Investigation Service.
Following my last article about how ruthless the taxman can be I thought I’d share some details about the Sackmans Tax Investigation Protection service.
The service covers the costs of professional fees for dealing with an Investigation and gives you a dedicated team of legal consultants, barristers, solicitors and legal executives.
There is unrestricted access to the service and it does not just cover tax investigations. You can call about any commercial legal problem. This includes contracts, landlord/tenant queries, employment as well as health and safety.
The service for tax investigations is up to £100,000 and covers both the full and aspect enquiry. Like any services there are conditions and exclusions but it covers:
- PAYE
- VAT
- IR35
- Business Inspections
- Specialist Investigations (limited to £5,000)
- Interventions
- Partners and directors personal tax
What is not included is making good your business records, claims on matters which originated before the cover started and accounts/returns which are submitted more than 90-days late.
Make sure you are protected have the assurance of good financial systems and record keeping.
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.
