So, you are next in line for the tax enquiries and investigations London businesses undergo. It is something no owner wants to experience but it does happen. Being investigated is an incredibly stressful experience that eats away at your resources and time. It can leave you asking yourself, “why me?”. We are here to try and help answer that question, or at least list some of the possible reasons why.
Submitting late tax returns
HMRC quickly becomes suspicious of businesses that consistently file tax returns late. Yes, we know it is demanding when you are in charge of a business and you might forget a few dates and deadlines. However, submitting your tax return on time will save you a great deal of time, money, and stress in the long run.
Is anything missing?
Make sure you declare all income sources; don’t let anything slip your mind. HMRC has a lot of technology at their fingertips to track you and dig deeper if they think you have done this on purpose.
Something important to note is that social media now plays a role in identifying potential tax evaders. For example, declaring minimal income but posting about buying a new car will likely lead to an enquiry.
Inconsistent cash flow
HMRC will pick up on drastic or sudden changes to the income and outgoings that you report. It could be plummeting income and sky-rocketing expenditures. This will result in alarm bells, so if it is the case for you, you will need to be able to explain yourself. There could be a completely innocent reason but you will need evidence to prove it.
Consistently making mistakes
It is true that nobody is perfect and everyone makes mistakes. Despite this, regularly making errors on tax returns will lead to HMRC asking why. We know that tax returns are fairly complicated. But, if you aren’t confident that yours are accurate before submitting, you need to be consulting professionals.
Selected at random
It is entirely possible that there is no reason behind why you are being subjected to an investigation. While it is unlikely, HMRC sometimes selects large businesses at random for an audit. In these cases, they focus on those that have undergone strong periods of expansion or growth thanks to the quick change of their business and size. Just make sure you address these other areas to minimise your risk.
Help with tax enquiries and investigations in London
Brian G Lonis & Co offers reliable accounting services. As a result, you will be able to keep everything in order and take care of your finances.
We offer assistance with tax enquiries and investigations London businesses find valuable during this difficult time. If this is something you would like us to assist with, just give us a call. We would love to help you however we can.