Forewarned is forearmed. By preparing in advance, you can vastly reduce the stress and impact if/when you are picked for a tax investigation. Here are some tips:-
- File accurate tax, VAT and payroll returns on time, and pay tax owing within the specified time frame. Flaunting the rules and the suggestion of haphazard accounting records will attract the attention of the Revenue.
- Get tax investigation insurance. Depending on the size of your business, accountancy fees for a full investigation can run into the hundreds or even thousands of pounds.
- Use the white box note on your tax return. If your figures have changed a lot since last year, your profits are different from the industry average or your living expenses are funded by other means (e.g. spouse’s earnings or an inheritance), disclosing this in the white box note may give the Revenue all the information they need and so prevent a tax investigation.
- Keep good records, and keep them for at least five years after the filing deadline. As of 2015, this means you should have your papers going back to at least the 2008/09 tax year. VAT records should be kept for six years.
- Use a good accountant. Innocently claiming expenses you’re not entitled to can still result in receiving a penalty. We can advise you on what can and can’t be claimed against your tax bill, so if doubt, just ask.
If you need any assistance, please contact us and we will be more than happy to help you.