Running any type of business is hard work and if you are facing a tax investigation, then the first thing to do is make sure that you don’t panic. There are a multitude of things that can cause HMRC to conduct a tax investigation from random bad luck and late returns through to dramatic fluctuations in income or being based in a target area. Whatever the reason, the first thing that you will need to do is keep calm and there is no need to immediately expect the worst as panicking won’t help.
Seek Expert Help
Once you have taken a few deep breaths, it’s time to seek expert help and advice. You can do this by looking online for an accountant or financial advisor that offers you the option to click here for further information on tax investigations and you will need to provide this company with the original letter that you received that informed you that you are being investigated.
Here’s why it is so important to get expert help:
- They will understand the jargon
- They will have experience handling similar cases
- They will have an understanding of tax investigations that will be invaluable
- They will be able to explain what you can expect throughout the process and help to burden some of the pressure
You will need to be 100% honest with both the HMRC and the advisor that you employ to help you through the case.
Prepare for Meetings
While some investigations may only involve a few letters, others can last for many months and you might have to attend numerous meetings. It is vital to be fully prepared for these meetings by reading the letters you receive carefully, as they will indicate what you need to bring. Also ensure that you dress professionally and go into these meetings with a professional attitude, as holding a grudge about the investigation won’t help you through the process any quicker.
After the investigation, HMRC will need you to agree to a settlement figure and this is usually calculated by the following:
- Approximately 15-100% of the amount of tax, penalties and interest that is due
It is important to ensure that once you have reached an agreement for repayments that you stick to it and you can use your accountant to help you through the negotiations, which will include an agreed amount and when you have to pay.
Keep your Tax Private
Getting advice about what to do from friends at your local pub is never a good idea, as they will likely give you inaccurate information and having the whole town talking about your financial woes will only add to your stress levels.
HMRC have multiple resources at their fingertips and they will ask questions until they get to the bottom of everything to do with your finances. Being honest is vital and the more compliant you can be the better it is in the long run and any good accountant or advisor will be able to help you through a tax investigation.