16 Sep UK Tax Investigations: Everything You Need To Know
Tax investigations in your business are more likely to happen if the HMRC and HM revenue suspects that your tax returns are not accurate. The process is usually stressful, and when you find you are in such circumstances, take expert advice unless you are 100 percent sure about your position. The article will highlight more information on UK Tax Investigations: Everything You Need to Know.
You should expect such investigations when the HMRC suspects that you are deliberately concealing your income or making mistakes when it comes to tax. They will look at your corporation’s tax returns as well as income tax. The frequency of such inspections will depend on HMRC suspecting you are underpaying your tax, overpaying, or deliberately doing something wrong. When it happens you have been overpaying your taxes, then you will receive a rebate interest. When you underpaid, you will be required to clear owed taxes within 30 days. Deliberate wrongdoing may escalate the case to criminal status.
Some situations will prompt the investigation to happen. They include filing and paying tax late while making errors that need correcting, inconsistencies in different returns, your costs are too high for the industry you are in among other red flags. It is important to have a tax investigation cover or joining an organization that offers cushioning against such occurrences.
The HMRC will contact you with a letter telling you that they need certain information from you. They would expound on the letter particular areas of your tax returns or maybe a full-blown tax investigation. The accountant can tell you explicitly why the HMRC is investigating your business
It is imperative to seek advice from a specialist on how you will address requests for documentation and information from the HMRC. The minute you get the letter, you must respond to them as soon as possible in writing rather than a telephone call. Do not lie or try to destroy evidence because, in the end, it may catch up to you. This can result in a penalty.
You may want to pay up accounts of the tax bill. This can tremendously reduce the payable interest you would have to pay. This gesture will only show the tax investigators that one is reasonable and lenient. Try to negotiate on an agreement that will not hurt your business. Once the investigation starts, it often takes several months to its completion. The process may also expand depending on the gravity of the matter.
For instance, a corporation tax investigation can go on to inquire into the income tax of its directors. The professional will however tell you what to do when the investigators are asking for too much information. Taking your time to respond to them or behaving in unrealistic ways will dawn more trouble for you.
The expert you choose to help you throughout this predicament should be trained and experienced. It is only then that you will be able to navigate through this process. The expert must be reliable and give you realistic advice that can help you during this period.