Crackdown on Inaccurate Self Assessment Tax Forms
The Guardian has published an excellent article on the Inland Revenue's intention to raise an extra £3bn per year from personal taxes over the next two years. One of the main ways this will be achieved is by tightening down on the accuracy of self employed self assessment tax declarations...
"In 2004/5 the Revenue launched inquiries into about 3 per cent of self-assessments - 260,000 individuals - and this year it is likely to carry out more. The government has announced that over the next two years it intends to increase payment of personal taxes by more than £3bn, and that will mean a lot of investigations.
An inquiry normally takes one of two forms: 'aspect' inquiries look at a section of your return and are over (relatively) quickly; 'full' inquiries go through everything and can takes years and thousands of pounds in accountants' fees to resolve. And that's if you are clean - if there are inaccuracies, there will be additional tax, interest and possibly penalties to pay. For anyone filing for the 2005/6 tax year, inquiries can be launched until 31 January 2008.
Most investigations will be sparked by something fishy about the return, but about 10 per cent will be randomly selected. Those most likely to get an unwelcome manila envelope through the door are wealthy self-employed individuals with complex self assessment returns."
Speaking to Bytestart, John Marks, who publishes Insider Secrets of a Tax Investigator added, "Many seem to think that because their businesses are very small, the 'Taxman' will not notice them. How wrong they are. HMRC have state of the art technology at their disposal and are very much aware of the activities of individual traders. Most often under the self-assessment spotlight are small businesses and the self-employed.
"In our audio CD guide, ex-Tax Inspector, Peter Clare reveals the simple steps you need to take to minimize the likelihood of you and your business being subjected to an HMRC tax investigation.
"Those individuals that fail to pay the appropriate could find themselves facing a heavy financial penalty, business closure, loss of the family home or even imprisonment. And they will still have to pay back all taxes due.
"The only answer is to play it straight and play it fair. Who wants to be looking over their shoulder for the rest of their working life? But that doesn’t mean you have to give it all away to the taxman. Just be sure to claim for every single allowance available and for every single tax deductible item which is applicable."
You can read the full Guardian article here. To find out more about the audio CD guide, Insider Secrets of a Tax Investigator click here
Posted January 12, 2007
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