The likelihood of HMRC enquiring into every business is on the rise

The “tax gap” (the difference between the amount of that should (in theory) be collected by HMRC against what is actually collected), stands at £36 billion, 6.5% of theoretical tax liabilities – the smallest gap for more than ten years, and VAT is a large chunk of uncollected taxes, accounting for more than 1/3, at £12.7bn. It’s likely HMRC could come knocking so it’s important to contact your Accountants Bolton for advice.

There’s a shrinking “tax gap” and HMRC are looking to reduce it, and VAT is in the cross-hairs. There are also changes to the VAT flat rate scheme.

There’s a perception that HMRC are just targeting avoidance/ evasion, however we’re seeing more reviews into businesses that may have made a mistake/ interpreted information incorrectly, and their mandate is very far-reaching with various data sources – both private and public to raise flags.

Almost 40% of the reason behind uncollected taxes are classified by HMRC as one of the following; “Failure to take reasonable care”, “Error” or “Legal interpretation” – which all could be an individual carrying on with business and not knowing they aren’t abiding by the letter of the law.

We recently advised where HMRC had reviewed a client’s records and VAT returns/ submissions. Where certain items had been zero-rated by the business, HMRC decided that they had been incorrectly rated and needed to be altered. This alteration led to HMRC seeking a significant increased payment from the client.

This aggressive tact by HMRC is something we’re frequently seeing as Accountants Bolton. In this instance, we reviewed HMRC’s report, defending the client’s original rating and eventually HMRC dropped their re-rating, therefore the client no longer had to pay the HMRC liability of more than £100,000.

For more help with finances call 01204 534031 or email ian.orgill@chw-accounting.co.uk


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

Follow us

Tweets by @CHW-accounting

CHW-Accounting
@chw-accounting


Twitter: chw_accounting

Read enough?

Want to find out how we can help you and your business? Get in touch today and let's have a chat.

WHAT'S THE NEWS?

Grab a biscuit and a brew and read our latest news.

20 May 2019

How long must I retain my books and records?

by

HM Revenue and Customs ( HMRC ) may check your records to make sure you’re paying the right amount of tax, but how far can they go back & how long should you keep business records?


Read more >

12 April 2019

Claiming back VAT on a vehicle purchase

by

You can usually reclaim the VAT paid on goods purchased for use in your business. However, with vehicles these often include an element of personal or private use. We explain the rules regarding reclaiming VAT on vehicle purchases.


Read more >

1 April 2019

Loans to employees – what you need to know

by

Whilst a business is perfectly entitled to loan money to employees or relatives, there can be tax implications if it does.  Here’s our brief reminder of those implications.


Read more >

28 March 2019

Guide to Payroll Changes from April 2019

by

If you are an employer there are several payroll changes which come into effect from April 2019 of which you should be aware.


Read more >

20 March 2019

Did you know – Uninhabitable properties are not liable...

by

Since April 2016 an additional 3% stamp duty charge has been imposed on buyers purchasing a second home. Irrespective of the circumstances. However, following a recent…


Read more >

YOUR CHALLENGES

No matter what your challenge is, we’ve probably dealt with it before.



Need an Accountant?

Get in touch >


Need an Accountant?

Get in touch >


Tax issues?

Find out more >


Tax issues?

Find out more >


Trying to grow your business?

We can help >


Trying to grow your business?

We can help >


Managing cashflow?

We can help >


Managing cashflow?

We can help >


Starting a business?

We can help >


Starting a business?

We can help >


Looking for funding?

Need help with funding? >


Looking for funding?

Need help with funding? >


Buying or selling a business?

We can help >


Buying or selling a business?

We can help >


Adopt the cloud?

We can help >


Adopt the cloud?

We can help >


What else can we do for you?

We can help >


What else can we do for you?

We can help >
CONTACT US

Get in touch, no hard sell, just a brew, a biscuit and a chat.