28 Jul Handling a HMRC inspection for small-medium enterprises
Most small business owners tend to get stressed at the prospect of an inspection from Her Majesty’s Revenue & Customs. At best, it can be an inconvenience which takes up time when you could be otherwise getting on with day-to-day business, and at worst it could identify some oversights on your part which means getting hit with a hefty tax bill. In this article, we’ll take a look at things to consider to ensure your inspection goes smoothly.
Understand your rights
Familiarise yourself with the Taxpayers’ Charter in order to have complete clarity of the situation at hand. If needs be, contact an accountancy firm to explain things in an easy to understand manner. Get familiar with the HMRC Litigation/Settlement Strategy, and understand how HMRC are likely to conduct themselves in order to avoid any nasty surprises. If you’re meeting face-to-face with an inspector, it’s good practice to request an agenda before the meeting to help you to prepare.
Get some professional advice
Regardless of whether you’re subject to a HMRC inspection, it’s always a good idea to seek independent VAT advice or payroll tips in order to keep the finances of your business running smoothly. Keeping your financial house in order can be a time consuming task, and in most instances outsourcing your accounting to a cloud-based firm can save money in the long run as if frees up your time to get on with generating sales leads instead of being bogged down with bookkeeping and VAT registration.
Prepare yourself mentally
After HMRC has finally agreed your current tax position, you can expect to receive either a closure notice or a notice that the enquiry has been listed to appear at a tribunal. If the latter is the case, remember to remain calm – you will therefore be in a better position to challenge any levy that seems unjust or heavy-handed. Even simple enquiries can take up to six months to complete, so prepare for the long haul.
Consider taking out tax investigations insurance in order to cover any fees – just ensure that you purchase it before submitting your tax return.