tax investigation - small business

[Pullingmyhairout]

please help, i cannot sleep

I am being investigated by the inland revenue (random aparantly) and i have been for an interview. I no longer have the shop. Unfortunately i went myself and thought that honesty would be the best policy and i had nothing to hide. However, I now regret this and dont know where to go from here? My accountant has no tax experience and is newly qualified (family member). In the interview i now realise i got the timeline mixed up and have told them something that is not true. It was to do with how i priced my merchandise and i now realise that i told them i trebble when in that year i only doubled to get the price. I was going to ring them monday but dont know if it is best to get professional advice instead? I dont even know if i need a solicitor or a tax advisor or who i need.........i know i need sleep but theres not much chance of that. Do you think they will beleive me if i tell them i made a mistake?

[AvocadoK]

You need a tax adviser will experience and expertise in tax investigations. Try the 'find a professional' button at the top of the page, and select 'tax investigations' to see if there is anyone near you. Also, if you post to say whereabouts you are in the UK, one or more of the regular contributors to this forum might be able to help you.

I would certainly say you need to set the record straight with the Revenue, if you realise you have not said the right thing. But don't panic, and don't feel you have to ring first thing Monday. Get advice first. The Revenue always provide notes of the meeting, which they will ask you to confirm as being accurate, or amend as necessary. So you will have an opportunity to say, "yes, that is what I said but I realise I got it wrong and should have said the following..." There is no reason for them to disbelieve you if what you say stacks up.

And if you try to think of the Revenue officers as human beings the same as you, you might sleep better!

Regards

AK

[wamstax]

unrepresented meetings with HMRC are not advisable as you have found out to your cost. The easiest way to resolve your present difficulty would be for example if you had purchase invoices for the goods you dealt in at that time and a sample sales price list. Equally you might be bale to prove your point by examination of a sample sales invoice and the purchase invoice behind the finished goods etc.

Yes I agree that you probably would be best getting professional advice, however do not panic and do not stress. OK I know that is easy for me to say but if you sit back and say ok I made a mistake (probably because the HMRC officer wasn't too precise on the period they were asking about at that point in the meeting or as usual they jump from present to past tense in their questioning.

As long as you are telling the truth you should be able to get the underlying evidence to prove your point if the doubting thomas's won't believe you as long as you don't stress out and forget your business procedures. remember you should know your business very much better than an HMRC Inspector - few of who have ever been in business on their own account at any time.

Hope this helps
bill@wamstaxltd.com
www.wamstaxltd.com

[Kidderminster Tax Advice]

I have every sympathy for your concerns and desire to set the matter straight with the Inspector.

I used to be a Tax Inspector with HMRC and, in my experience, most inspectors take into account the lack of knowledge and familiarity with the investigation process of unrepresented taxpayers and are willing to make allowances for that. So, if you do contact the Inspector to explain your error then hopefully he or she will understand how it came about from the confusion and stress of the interview.

Your problem highlights another point, though - the importance of thorough preparation before you meet with or contact HMRC. The Inspector will have done his or her homework before meeting you and you should prepare likewise. If you do call HMRC, make some notes beforehand of the points you want to cover so that you don't forget them in the heat of the moment.

If you find that your case cannot be resolved easily or swiftly, then it may be advisable for you to consider taking professional advice. Your adviser will bring to the case the expert knowledge that you and your accountant lack and may be able to settle it sooner on your behalf, whilst at the same time lifting from you some of the stress that you are experiencing at present.

I'm based in the Midlands and if you decide that you would like to explore getting professional advice I'd be happy to speak to you on a no obligation basis. My contact details are on my website at www.k-tax.co.uk.

In any event, good luck with your case.