How to prepare for a tax investigation
All businesses must keep records in preparation for investigations from HMRC. The UK Taxation has announced that it will investigate about 250,000 businesses across the UK over the next two to five years. Therefore, we recommend that all businesses in business keep clear invoices and books in order to be prepared for HMRC to come and inspect the business at any time.
HMRC issued the following rules for record keeping:
(1) Invoices must be kept in order of date
(2) Clear declaration of weekly income and expenses
(3) Income Invoices
(4) Bank Statements
(5) Payroll
(6) A list of people who work for the business.
During the investigation, they will ask about daily income and expenses, shop lease sheets, bank accounts, cash for business miscellaneous expenses, etc.
Therefore, you must be cautious and comply with the laws of the Ministry of Revenue to avoid heavy fines and possible tax increases.
The Ministry of Taxation will also consider the real estate investment that you touch. They can investigate from 20 years ago the properties you bought or sold. They are very attentive to the method and method of making a deposit to buy a house. Note that the profits from the sale of the house will be considered on a regular basis.
With the investigation by the Department of Revenue in the near future, it means that you may incur some fees or penalties because the business owner will be fully responsible for the tax. In order to protect your business against HMRC investigations, you can appoint an accountant to act on your behalf, but please note that representing you is not included in the fees for the day-to-day services we provide to you. Therefore, you may pay an additional fee for this investigation. Fees can be huge depending on the individual case. Therefore, we recommend that you buy insurance to protect yourself.
As many of us know, recently HMRC and the UK Border Force came to inspect businesses in the UK.
To prepare the necessary documents for them, the accounting firm HT Accountants advises businesses to prepare the following documents:
1) Daily income book and appointment book for guests
2) Business bank statements and bank credit cards
3) Labor contracts for employees, working time and identity cards of the employees of the salon.
4) Health and safety and pension regulators
5) Value Added Tax (VAT)
6) Business licence and insurance
7) Business Leases
HT Accountants Office has a card to help you prepare some of the above documents.
If any of you are under investigation, our office can assist by contacting the Department of Revenue directly.