my tax investigation
Discussion
well i had my meeting at my accountants office yesterday morning along with 2 butch ladies from the inland revenue......or was it the bloody gestappo 
hard to tell the difference really.
i never did find out the reason i was being investigated, although she was really probing if i had been doing cash work.
she did catch me out on a couple of things though, i had booked out some plumbing materials to use on my own home and put them through the business and she found it grrr, by checking my invoices/quotations.
i got the feeling she was not going to give up until she found something
so im in for a little more tax to pay and a small fine as i co-operated.
once again i asked my accountant if moving from house to house... was going to make me liable for capital gains or income tax, and i suggested even if i moved 10 times in 10 years how would that reflect, and she insists i will be ok, as long as i live in each place more than 6 months.
hard to tell the difference really.i never did find out the reason i was being investigated, although she was really probing if i had been doing cash work.
she did catch me out on a couple of things though, i had booked out some plumbing materials to use on my own home and put them through the business and she found it grrr, by checking my invoices/quotations.
i got the feeling she was not going to give up until she found something
so im in for a little more tax to pay and a small fine as i co-operated.
once again i asked my accountant if moving from house to house... was going to make me liable for capital gains or income tax, and i suggested even if i moved 10 times in 10 years how would that reflect, and she insists i will be ok, as long as i live in each place more than 6 months.
It's not as simple as that. However, the Revenue may chose not to be bother pursuing this area.
The next step will be the Revenue sending you out a letter outlining the shortcomings in the information they received from you and the estimated shortfalls in tax and NI paid by you. They will ask you to agree to their findings and, once agreed, they will proceed to assess the missing tax amounts, levy any interest due and charge any penalties they think fit.
The next step will be the Revenue sending you out a letter outlining the shortcomings in the information they received from you and the estimated shortfalls in tax and NI paid by you. They will ask you to agree to their findings and, once agreed, they will proceed to assess the missing tax amounts, levy any interest due and charge any penalties they think fit.
unclemark123 said:
she did catch me out on a couple of things though, i had booked out some plumbing materials to use on my own home and put them through the business and she found it grrr, by checking my invoices/quotations.
About time you were a bit more vague on invoices etcie Supply and fit of new central system
Not 4 lengths of this, 6 lengths of that, 12 washers, etc.
On the not giving up until they find something, it would seem they really will not stop until they find something. Same thing happened with the brother, his missus worked in accounting for many years before coming to work with him and consequently she did absolutely everything by the book, made it all rather unpleasant even though they had absolutely every "i" dotted and "t" crossed. It would have been much easier if they had been sloppier and had a wrist slap, rather than getting the nth degree job for having the accounts done correctly.
It is stressful enough.
It is stressful enough.
We had an investigation about a year ago - we got a clean bill of health, which we were very pleased about. Interestingly, after the audit they did tell us why we were "selected":
There was a young lad we emplyed for a few weeks to help us out in our IT Dep't, just for a short period. He then went on to university and duly applied for a student loan. Some computer somewhere decided he couldn't be both at work and applying for a student loan (not withstanding the fact he only worked for us for a couple of months over the summer) and "wallop" - we were suspects! It goes to show how the different departments talk to each other (and you're guilty until proven inncoent) in that monstrosity which is called the civil service. (And they're neither "civil" nor "servants".)
There was a young lad we emplyed for a few weeks to help us out in our IT Dep't, just for a short period. He then went on to university and duly applied for a student loan. Some computer somewhere decided he couldn't be both at work and applying for a student loan (not withstanding the fact he only worked for us for a couple of months over the summer) and "wallop" - we were suspects! It goes to show how the different departments talk to each other (and you're guilty until proven inncoent) in that monstrosity which is called the civil service. (And they're neither "civil" nor "servants".)
After relocating a few years ago, I was renting a flat in my company's name, and recharging half the rent to my dad's company as he had a foreign student in the second bedroom.
Rent transactions are, of course, VAT free.
Cue one VAT investigation to find out why the percentage of VAT to sales had dropped below 100%
The first question I was asked was, "Do you raise a VAT invoice for every transaction?"
I asked if anyone ever answered no to that question, and the nice lady said "you'd be surprised..."
Rent transactions are, of course, VAT free.
Cue one VAT investigation to find out why the percentage of VAT to sales had dropped below 100%
The first question I was asked was, "Do you raise a VAT invoice for every transaction?"
I asked if anyone ever answered no to that question, and the nice lady said "you'd be surprised..."
Always stick something in the accounts for HMRC to find. You ARE going to get investigated at some point and it IS gonig to cost you time and money. Better to pay out a few hundred/thousand quid and be done wiht it quickly than have a very very protracted investigation.
having said that i had a VAT investigation (sorry- compliance check) a couple of months ago and thy have just sent me a cheque for £2k which was nice- i haev no idea how they came up with that and neither does my accounant, but we aren't going to ask for an explanation.
i have a very very good friend who runs a large restaurant and is one of the cleanest and most honest people i have met- he never ever ever takes a single penny in any form from his business that isn't declared- he recently declraed a half portion of chips for his son!
his revenue investigation took 9 months before they left him alone because they just couldn't and wouldn't beleive that he was uttely and completely clean. ould have been much much cheaper to give thm a couple of grand.
having said that i had a VAT investigation (sorry- compliance check) a couple of months ago and thy have just sent me a cheque for £2k which was nice- i haev no idea how they came up with that and neither does my accounant, but we aren't going to ask for an explanation.
i have a very very good friend who runs a large restaurant and is one of the cleanest and most honest people i have met- he never ever ever takes a single penny in any form from his business that isn't declared- he recently declraed a half portion of chips for his son!
his revenue investigation took 9 months before they left him alone because they just couldn't and wouldn't beleive that he was uttely and completely clean. ould have been much much cheaper to give thm a couple of grand.
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