Tax investigation stresses.

mr-moon

jp1964 wrote: »

The answer to this is very simple, keep accurate records, and use a good accountant. We have two Limited Companies and pay a total of £200 per year for Tax Investigation Insurance, so that we have the peace of mind of knowing that should we be investigated for any reason the accountants will take care of things for us. The yearly cost of a good accountant is well worth it, and saves a lot of unknowing mistakes and a lot of hassle and stress.

When we recently had to prove our income for a loss of earnings personal injury case, the accountant was brilliant, and we were able to prove that our earnings were correct in order to get a settlement.

Hope this helps.

Do you mind if I ask how long you've been in business and if you've ever been investigated?

chrismac1

Statistically a given tax return is 3% likely to be the subject of a tax check or enquiry - source for this is Taxwise survey in about 2011, no reason to think it has increased given the HMRC staff losses.

HMRC have something called "Agent View" whereby they use their database to review the entire HMRC client base of a given agent.

In the last 5 years my client base has had an average 1.5% chance of an enquiry or tax check. So half of the national average. The total extra yield in tax and penalties for the enquiries and checks was £0.00.

Within 1 mile of my practice, another agent has recently been in the national press for getting struck off for being very naughty in a tax case. The penalty alone in that case was £10,000 with no doubt more to pay in back taxes and interest. I am aware of other clients in that particular agent's portfolio where there is similar low-hanging fruit.

If you were HMRC looking at Agent View, which agent would you chuck your scarce resources at?