HMRC temporarily suspended tax investigations during lockdown. However with public spending soaring due to Government schemes such as Furlough and SEISS, HMRC are expected to impose harsh penalties for underpayment of tax, as they did after the last financial crisis.
Tax collected and penalties imposed are an important source of revenue for HMRC and far outweigh any costs associated with investigations, so we should be prepared for activity in this area to ramp up.
50,567 penalties were levied last year on tax payers who failed to “take reasonable care”. This includes accidental errors or not seeking the advice of a competent professional. Penalties of up to 100% of the tax due can be issued against tax payers who HMRC believe to have deliberately given inaccurate information on their tax returns.
If you are unsure about what you can claim or anything else regarding tax, then always speak to your Accountant in the first instance.
We would also recommend taking out Tax Investigation Cover. If one of our clients takes out this cover through us, we would then be able to support them, communicate with HMRC throughout and defend their position, without any invoice for our time, should they have a tax investigation or enquiry.
Call us on 0113 2864486 if we can help.
Photo by Josh Appel on Unsplash
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Company Year End
The legal and compliance burden put on businesses through the need to submit tax returns and other such documents to strict deadlines is often one of the most stressful elements of running a business.
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Tax Protection
With HMRC becoming more spontaneous with tax investigations we strongly suggest that every business is insured against the cost of investigation. So strongly in fact, that we automatically build it in to our fixed fee agreements. Many of our clients have been very grateful for this insurance when HMRC have come knocking.
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