Brian G Lonis & Co offers full support to our clients at all times. Our aim is to take the stress out of the situations, whether it is preparing documents or responding to enquiries. This approach has helped us build an excellent reputation. Among other things we are the most supportive team to call on for tax enquiries and investigations Stoke Newington has.
Every year HMRC investigates thousands of businesses. In the majority of cases the investigation is because of one concern or another. Below are eight of the most common issues that could lead them to investigate you.
A tip-off
Surprisingly HMRC receives a number of tips expressing concerns about the accounting practices of a business. They can come from various sources including ex-employees, partners, and even your suppliers.
Making too many mistakes
HMRC appreciates that everybody can make mistakes with their reporting. They let this slide in many cases, especially when it looks like genuine accidents. If you make too many mistakes or they seem like intentional attempts to adjust the books, you will likely face an audit.
Large fluctuations
Big fluctuations in profits and losses can put HMRC on your cases. While they don’t expect businesses to make the same profit every year, they will be suspicious of a big jump or a massive loss.
Unprofitable
Many things can result in a business being unprofitable. HMRC will investigate businesses that don’t make a profit for several consecutive years. This is because they will wonder what is causing it and how you can continue trading.
Industry standards
HMRC can look at figures for entire industries to get a better idea of what the average earnings should be. If your business is wildly above or under this they may investigate to find out why.
Low director earnings
One thing that can make HMRC suspicious right away is if the directors of a business are paid less than their employees. This is a particular red flag with small businesses because it can indicate use of avoidance schemes.
Income omission
It may be tempting to omit things from a tax return. The problem is that these transactions will appear on the returns of other businesses and customers. As a result HMRC can spot discrepancies and will investigate.
Lack of representation
While it is not a rule you must have an accountant, it can offer many benefits. This is because they will represent your business and give it a more professional edge. HMRC may investigate business owners who don’t use proper representation because they think there is something to hide.
As you can see there are plenty of triggers. If you need help our team would be happy to assist you. The benefit of working with us is you deal with the top team for tax enquiries and investigations Stoke Newington has. This should give you great confidence.