Tax Investigation. Those two little words are enough to reduce even hard-nosed city slickers to whimpering heaps. With HMRC currently driving ahead and looking to vigorously pursue any believed tax evasion and fraud, a tax investigation seems like a more likely proposition than it did a few years ago.
Unless you’ve been unlucky enough to be picked at random, if HMRC comes a-knocking you can guarantee they’ve had their suspicions raised and are out to go over everything with a fine-toothed comb. It can be a harrowing experience for many people. Just look at what happened to poor Alan Partridge. Within seconds of the taxman (or in his case ladies) visiting, the fictional failed TV presenter cum local radio DJ was talking to himself, pretending to be R2D2 and breaking wind all over the place. A pitiful sight I’m sure you’ll agree, but one that has its lessons. So what can you learn from Alan’s experience?
If you’re under investigation seriously consider appointing professionals to represent you. Alan tried to deal with the investigation himself and was soon blathering on about Babybels before letting slip that he pays his builders cash in-hand. The stress of a tax investigation is no laughing matter, and an accountancy firm that specialises in tax investigations understands HMRC, how they operate and think, and so can help you get the best outcome from the investigation. They’ll also act as intermediaries allowing you to continue your life without the stress of interacting with the taxman.
Don’t Lose Your Head
Although a tax investigation is stressful, and a serious issue, most people blow it out of proportion. Images of lengthy jail sentences and monstrous penalties abound. The number of investigations that result in imprisonment are quite small, so try not to get too worried. If, like Alan, you end up putting on an impromptu puppet show for the inspector then you’ve probably let the stress get to you.
Prepare For Meetings
This relates to the above point. Don’t be like Alan and turn up to a meeting with some receipts on a spike, hoping to wing it. Offering insufficient records or information will be frowned on and can result in proceedings turning uglier than needed. Make sure that your records are in order and that any information that is legally requested is provided. Again, seek professional advice in this area.
Tell The Truth
OK, so Alan might have taken full disclosure a tad too far when he declared his fart to the inspectors, but he was on the right track. If you are tempted to lie, tell a half-truth or omit something, don’t. The quickest way to be on the full receiving end of HMRC’s considerable powers is to lie to them. Like everyone else, they don’t like it and they won’t forget it.
Obviously Alan’s situation is taken to extremes for entertainment value, but like all good comedy it’s simply a distorted view of a familiar reality: a tax investigation is a difficult and worrying process for most people who undergo one.
To make it easier on yourself seek advice from a tax investigation specialist. Although the service will cost, it will more than likely end up saving you a great deal of time, money and stress. This means you can focus on running your business, or if you’re a bit more like Alan Partridge, nip down the local for a quick pint.
For more information and advice on how to best act in the event of a Tax Investigation visit http://www.bakertilly.co.uk/services/tax/tax-risk-and-investigation-management-services.aspx