Tax audit issues

Kirkmain

We keep being told that HMRC can

Phoenix72

Statute of Limitationa does not apply to Government debt and HMRC can in fact go back 20 years for deliberate behaviour and fraud.

Hoenir

Depending upon the circumstances of the individual case HMRC can go back as far as 20 years. No need to audit. They can issue a discovery assessment. Onus is then on the taxpayer. 

Tax_Accountant

HMRC can go back 20 years and they have all the means to collect data. Personally, I have been handed over hand written pass books of clients going back to 1998 in one of the cases. 

Kirkmain

Interesting, so does anyone have any idea what my IFA was referring to when they said they can't investigate back 5 years? Is that just how long banks can hold statements for?

Phoenix72

Kirkmain said:

Interesting, so does anyone have any idea what my IFA was referring to when they said they can't investigate back 5 years? Is that just how long banks can hold statements for?

Maybe because IFA's are generally not tax experts?

Why are they advising you on a tax matter?

Dazed_and_C0nfused

Phoenix72 said:

Kirkmain said:

Interesting, so does anyone have any idea what my IFA was referring to when they said they can't investigate back 5 years? Is that just how long banks can hold statements for?

Maybe because IFA's are generally not tax experts?

Why are they advising you on a tax matter?

This ^^^

You wouldn't ask your accountant which stocks to invest in.

badmemory

It is generally current year plus 5 years.  I would expect them to audit those years & if there is evidence for it then to go back the 20 years.

Bookworm105

Kirkmain said:

Interesting, so does anyone have any idea what my IFA was referring to when they said they can't investigate back 5 years? Is that just how long banks can hold statements for?

I would suggest your IFA is rather unknowing.

Your refer to "business" , if that means a company then Section 388 of the Companies Act sets out the document retention period. It requires that invoices, receipts and transaction records used to produce the financial statements of the company (accounts and if applicable VAT returns) are retained for a period of 3 years for private companies and 6 years for public companies. That means from the end of the accounting year to which they relate, not from date of each transaction.

HMRC can investigate 4 years back for "innocent" errors and 6 years for errors that can be deemed to have arisen from ‘carelessness’ or negligence’, and as others mention, for up to 20 years in the case of suspected deliberate "evasion".