HMRC or Her Majesty’s Revenue and Customs is part of the UK Government that collects taxes, payments, and other regulatory regimes such as minimum wages.
If you are a small business owner or a manager of a large corporation and HMRC tax investigations comes knocking on your door, this doesn’t automatically mean that you are in trouble.
Instead, they might feel that an inquiry is needed because there are mistakes on forms, or they might think that the payment was enough for the previous season. Although discrepancies in your company figures can trigger inspections, some of them are completely random.
On the other hand, if your balance sheet or your reports are in the array, you might end up in jail or getting a massive amount of fine. If you want to survive the investigation, here are some steps that you can take.
- Relax
What most business owners should do when they receive a letter of the inquiry is to calm down. They should take a deep breath and never panic. Even if this comes as a form of pressure, don’t make the mistake of contacting the revenue officers too quickly.
Sure, the letters may be threatening or appear demand a quick response. But according to a spokesperson in the HMRC, they exist to help out small business owners who are genuinely trying to pay their taxes in the right way. Read more news about what’s happening in HMRC when you click here.
The collection officer can even guide and direct a business owner to the right way of doing things. There are examples of the department extending payment deadlines if, say, business is having a hard time in the financial department. They can provide leeway that can make owners pay half of their taxes on a specific period, and the other half will be on the next promised date.
- Take Any Inquiry Seriously
There are three categories when it comes to an inquiry. They can be aspect investigations, full, and even random. The aspect type of queries are scenarios where one or two areas of your taxes are reassessed. The full ones will inspect everything about your business and your returns. Random inquiries are made on areas where the risk is the highest. Random investigators target a specific aspect of small to medium enterprises. Regardless, any investigation should be taken seriously.
Hiring Specialists to Help You
When it comes to corporate taxes, you need someone skilled and who knows their ways on how the system works. Some specialists have decades of experience working with big companies and small business start-ups that they know how to deal with the most complicated issues that you can have with HMRC. You can know more about when a business is considered as a small start-up here: https://smallbusiness.patriotsoftware.com/what-is-considered-small-business-classification-size/.
When you know the kind of obligations that you needed to pay and those that you can skip without getting into trouble with the law, you will save a lot of money every year. Specialists for withholding taxes will make minute examinations in case of fraud and make sure that your checks are valid. In case you are trapped with an investigation, your specialist will speak and fight for your behalf.
Great Communication
Being able to communicate and know the right words to say is an essential skill in front of tax authorities. A tax accountant can make authorities view you in a better light if you have discrepancies on your forms. These professionals are well-equipped with tools and tactics that will ensure that the authorities are satisfied with your payment.
Detailed Understanding about HMRC
The HMRC system is a complicated maze. It would help if you had someone who is a step ahead and know how the systems work. Most accountants know the rules and regulations, do’s and don’ts, as well as tricks about paying taxes. This does not mean that what they are doing for your company is illegal, though. They just know about loopholes and extra expenses that you should be skipping so that your hard-earned revenue will go to your business instead of the authorities.
Most Specialists were Examiners Themselves
Most accounting specialists were previous tax investigators from the authorities themselves. Therefore, they know what the investigators will check and what to avoid during interrogations. Since they previously worked with the HMRC, they know the rules and regulations, which can help a lot in saving you and your business from prosecution.