Inland Revenue Tax Enquiry!

chodges84

Just out of interest, when a tax inquiry is being conducted, what happens, do you have to go in to the offices and talk to an advisor or what?

Minerva_2

Hopefully not! No, they have asked for copies of invoices, receipts, ect, to prove all of our expenses claims. That amounted to a vast amount of photocopying, over 100 invoices/receipts sent off. I handed it all in to the local tax office - there was no way that I was going to trust all my hard work to the Royal Mail!

And no, I don't have anything to hide, but it just feels as is your honesty is being called into question somehow.

I will let you know when I hear back from them.

Thanks to everyone who took the time to reply.

Minerva

4nick8

The HMRC (HM Revenue & Customs as they are now called) Service Commitment is to reply to post within 15 working days.

The HMRC web site contains all their instruction books which are available under "open government". Look for the enquiry manual. This is what the officer working your enquiry must adhere to.

If everything is in order they will issue you with a closure notice. They might ask you to attend a meeting, but you are under no obligation to do so.

Don't worry! (Guess that's what Lester Piggott's accountant told him !)

SonniC55

Min

Chances are your going to need an accountant sooner or later, you could try doing your own tax return to save a couple of hundred quid on accountancy fees, but that money can be well spent if the accountant saves you a thousand in tax.

In relation to your enquiry provided your figures are up front and you declare all at the beginning of the meeting the inspector will normally be fair back, if he spots anything he doesnt like then he/she normally makes suggestions as to how you should be keeping records, producing accounts, etc. A word of caution however if there is any undeclared income that he finds, or if your drawings do not support your lifestyle the inspector will want to dig further, and will be less amicable.

An accountant will be able to help you here, If you find one now try to negotiate a deal on the fee for investigation assistance as your a new customer.

Penny-Pincher!!

My BIL had a tax enquiry last year for 2003 tax year. He has had the same accountant for over 10 years. At the end of the day, even if you have an accountant-you sign the dotted line to say your accountable for all entries via your accountant IYWIM. His enquiry took 13 months to complete and he had to pay back £3500 extra.

I think he was flagged that year because he had bought and moved to a more expensive area. Bought a new car and a new van, became VAT registered and had done an extension/loft conversion on his new property.

Hardly surprising really..LOL. I honestly feel that an envious member of the family reported him-but thats a whole other story!

He was totally honest and gave all the info requested. It was a very stressful time for him and his family and they also have 2 little ones.

All the best

PP
xx

halloweenqueen_2

We had this a few years ago, it was worrying but we knew we hadn't done anything underhand. I did sack my accounttant shortly afterwards, it turned out that it was a couple of mistakes on his part that threw up a few queries, we ending up owing them just over £100, the bill from the accountant shorting afterwards was nearly 10X that.

Try dealing direct with the tax people their original estimate was that we owed them around £400 which I wish i'd just paid but I took the advice of our accountant and ending up paying nearly 1200 all told.
The tax people are pretty straight with you if you are pretty straight with them.

Its very gut wrenching when you first receive the letter I must admit and it seems to go on for a while. I would be tempted to sort this out direct with them if you haven't had an accountant up till now and from then on do your accounts through a decent one. We now have a different accountant who is great. We originally had one so we wouldn't have any comeback with the Inland revenue but it didn't work out with that one.:mad:

inmypocketnottheirs

Minerva, where abouts in the country are you. I have a very reasonable accountant that may be relevant.

Puffin_2

Hi Minerva
I know exactly how you feel. You feel like your being hunted, and accused.

Well dont. Its true the IR randomly make enquiries.

I am in the middle of my second now, and I could sit here for hours typing about it.
I have had 2 so called good accountants, the 1st one was charging me £875/yr and the second spent years working for earnst & young before setting up on his own, and he charges about £400-475.

Both came highly recommended from several business aquaintances and friends.

Both a complete waste of time!!

I am trying to claim back £10,000,s of pounds wrongly paid because of them.

The problem lies in this, and I can say this with utmost confidence, and I challenge any Accountant to contradict what I am about to say.

There is not such thing as a 'Good Accountant'.

Reason being; we would all like to have a good accountant, good plumber, good doctor etc.

But these people are just flesh and blood, and they are NOT walking encycloepedias!!

The Tax system is SO VAST! that it is impossible for them to get it spot on, there are too many variables.

All Accountants know that its YOU who has to sign the return, and its YOU who is held responsible by the IR (and dont I know it).

I have had to go over 5 yrs worth of tax thinking I had it all sorted by accountants. and now I am confident that i can do just as good a job.

Keep good records, pay on time, and DO NOT be intimidated by the revenue, some revenue officers are very helpfull, some are just baffoons.

I was itimidated, thought it was all rocket science,,,well the amount of mistakes the revenue make is just as bad as the accountants.
Absolutley blatant mistakes some of them.

Keep good records of all letters they send you, all calls you make, and if you are ever unlucky enough to have them call at your house and demand £46k out of the blue like I did,,,(Gulp),,,keep your cool.

If you have been honest, kept good records, you will be fine, even if you have made some big blunders yourself dont worry about it, there are no pockets in shrouds, you bring nothing into the world you take nothing out.

And its good to now the Revenue cant dish out the death sentence.

I am not going to say its not stressfull,,,it is very stressful when you are on the recieving end, but take time out, walk the dog, walk your self, rest, food rest etc,,,,then go back to the paperwork and restart.

You can get lots of info straight from the Revenues web site, which is helpful.

again as far as accountant is concerned, dont bother, if you keep good records, and you have at least 1 brain cell (doesnt take more than that beleive me) then you will be fine. when the revenue asks for something give it to them,,,dont send originals,,and dont be too worried about your receipts adding up to .00000005 accuracy, they are not looking for minor mistakes.

I can tell you know 1 of my accountants made such a blunder it was almost like I was a complete doofus or a liar. And in all honesty the revenue have been quite fair about it,,you have to have reasonable excuse,,,(read their site).

Well all said, try not to worry too much,,you will be suprised how much the revenue will do for you, just give them the relevant paperwork. but you will still have to check their work yourself. ha ha.

Its not the end of the world, keep good records, get the point? keep good records,,even scribbles on paper is a record. names places, calls etc.

anyhow all the best,,,and remember this old saying when choosing to have an accountant or not

"Nobody will look after your money better than yourself"

Oh and one last thing about accountants,,,,lets assume one thing,,,that there are some who can count from 1 to 10 and add 2+2.

But I can Guarantee one thing; They are crap at reading English.

;-)

hjd

I am an accountant - I am not c**p at reading English, but then I also write a lot better English than you do...

Minerva_2

Have heard back from the Revenue and it is doesn't seem to be too bad.

They are saying that we underdeclared our income by £50 - which is probably just due to making an arithmetical mistake when adding up all the figures and they are also after a copy of a tax deduction certificate which I am sure I can either dig out or request a copy of.

Puffin - thanks for the interesting post re: accountants. I was so sorry to read of your dreadful experience. It is just the sort of thing that I dread happening. I am a terrible control freak when it comes to my money and in some ways I like to by responsible for my own records and accounts.

And having two enquiries - I was hoping that the old phrase "lightening never strikes twice" would also apply to the Revenue!

On the other hand, whilst I do have at least one brain cell (actually I have a First Class Honours degree, but not in anything related to accounts!) I find tax so complicated and it is so easy to make a simple arithmetic mistake or misfile a tax certifiicate in the wrong year, which is what I have done!

Will I be fined for the mistake? It was a genuine one!

AT least I have heard back from them before Christmas!

I have found an accountant who specialises in buy to let properties and I think that I am going to use them in future, I really don't want this worry again!

Hope you have a prosperous New Year, free from any tax enquiries!

Minerva