Why all businesses need to prepare for a tax investigation
HMRC is back with a vengeance. The department knows that Covid-19 support measures were particularly open to fraudulent claims, and they intend to recoup as much as they can.
You may be thinking that your business is fine. You know you were entitled to government support. Unfortunately, that may not be the case because defending an HMRC investigation can cost thousands.
How much can it cost if I didn’t do anything wrong?
Last year, a client of ours was approached by HMRC, demanding the business pay an additional £600,000 in VAT. The client was initially intending to pay the bill, assuming that HMRC would only request such a sum if they were entitled to do so, and not wishing to incur additional costs.
However, following a discussion with us, the client decided to challenge the claim. A date was set for a tribunal to determine the outcome, but the day prior HMRC decided to withdraw their case. A happy ending, in theory, except just preparing to take on HMRC involved a bill of more than £50,000. Simply defending yourself against HMRC can run up an almighty bill even when you’ve done nothing wrong.
What to do if HMRC contact you
It can be daunting when HMRC get in touch – something the department uses to its advantage. Make sure you’re protected and only handing over pertinent information when you are required to do so. Equally, don’t assume that behaving perfectly legally won’t cost you! You might not get a bill from HMRC, but you could get one from your accountant.
MHA Monahans Tax Investigation Service is designed to protect businesses in the event of an HMRC inquiry.
For more information on the service, please get in touch on 01225 472800 or visit www.monahans.co.uk