HMRC Investigation – Those are two words that fill most people with dread, even if you do everything in your power to follow the rule book to a T.
Honest taxpayers, with financial records on a tight rein, really have nothing to fear… but nonetheless, the prospect of an impending visit is still enough to bring most business owners out in a cold sweat as there is so much at stake.
But there is no reason why you should suffer with sleepless nights just because you’ve been given notice of a visit from the tax man. However, if this sort of thing fills you with sheer dread, then having a reputable accountant to guide you through it is certainly the best option for you – and your sleep pattern!
The team at Northants Accounting has put together a simple guide to ensure that you’re prepared for when HMRC come knocking on your door.
Take A Deep Breath and Calm Down
Firstly, and most importantly, you need to remain calm. This sort of investigation happens all the time, and despite what many may tell you, the tax man is not out to get you.
HMRC inspection notices often evoke countless fierce emotions in entrepreneurs that are already under assessment, mainly because we all read horror stories about business owners ending up behind bars.
But in reality, only a small amount of cases end with a custodial sentence being issued, so keep calm, work with a tax accountant and do not expect the worst.
Ask Questions If You Want Answers
Ideally, you’ll have an accountant by your side whilst the inspection is occurring. However, if you’re going it alone, do not be intimidated enough to avoid calling HMRC if you have burgeoning questions regarding the entire process.
The tax assessors want to work alongside you on a two-way, non-adversarial basis. They are just doing their job and they want businesses to come out of the investigation with a great result.
Preparation is Key
If you feel you have made any accounting errors, do not try to hide it. In fact, be clear and honest. If the tax inspector uncovers the mistakes you’ve been trying to hide, it might land you in hot water. Honesty really is the best policy, so come clean before it’s too late.
When it comes to documentation, be prepared to supply the tax man with invoices, receipts and other relevant evidence. Failing to provide crucial evidence regarding your taxes will arouse suspicion and it will certainly look like you’re hiding something. So, make sure you’re prepared and everything should go smoothly.
Hire an Accountant
Before contacting the HMRC directly, it’s better to hire an accountant who can help you navigate the murky waters involved in a HMRC investigation.
An accountant is the one who can pass on the necessary information as promptly as possible to the tax man. They are experts in this sort of thing, so they will be able to provide the tax man with exactly what they want to see in a timely manner.
Time is Of the Essence
If the tax man is demanding access to vital information, they will typically set a deadline. However, if you find the proposed deadline to be impossible to meet, you can request an extension so that you can ensure you gather the required evidence.
If you don’t do this and miss your deadline, you will face huge penalties, so it is best to face the problem head on, rather than wait around and hope for the best.
By following these tips, you’ll certainly be able to ensure that your business is prepared to face an inspection.
For guidance and advice on an impending tax inspection, get in touch today to ensure you have everything in order for a friendly visit from the tax man.