hi roy
re paying for random tax audit?
yes, tax do carry out random audits as you say, but they choose you, not the other way round.
the cost is not £ 900 the cost is what it costs you to service/defend the audit, it is not unusual in any year to hear of reasonably small businesses having to pay £20,000 to defend an AUDIT.
THE SYSTEM WORKS LIKE THIS, THE TAX SWOOP, THEY HAVE LOOK AND CONCLUDE THAT YOU HAVE NOT PAID/ HAVE DODGED/ HAVE MIS-CALCULATED THE MONEY YOU OWE THEM.
you have two choices
pay up or fight it
you have to prove them wrong
in tax speak you are guilty until proven innocent
this is where defending the audit comes in, if you and your advisers can prove the tax man wrong then you dont have to pay or you will pay less dependent on the outcome, maybe the tax were right and you do owe them money, but which ever way your advisers will sort matters out.
the rub comes at the end, even if the tax are proven to be totally wrong, even if it turns out that they owe you money, you still have to pay your advisers for doing the work and guess what, YOU CANNOT CLAIM YOUR COSTS BACK FROM THE REVENUE. a'int that a bummer.
follow georges advice join the fsb , loads of benfits and tax audit protection is only one, they also give legal advice etc which you could have used to get an answer to this question
cheers
for anyone that cares to know
fsb is £100 a year and £30 one off, beats £17 a month just to insure against an audit