[windywashers]

computer says no

tips, ha ha.

thats the best post so far.....

[Niall McAllister]

no i dont declair everything like 99% of people here, and 99% of business that take cash, big or small.

i earn as much as i can to give my family a good lifestyle

Interesting approach.
I break the law 'cause I think everyone else does.

[windywashers]

Niall,
do you declair all your tips, cash,  air miles, nectar points ect and  personal milage?? mmmm.....

[Niall McAllister]

all jobs go through george, at end of day. as i have said before i feel you should not have to declare tips as gift, but i do put them through.
don't even use a co-op card.
and have family car for personal business.
 i declare all earnings, but i also claim for every penny spent, even if it's just 30p for parking meter or 20p for tyre air.

[williamx]

Frequently Asked Questions relating to Inland Revenue Investigations   

--------------------------------------------------------------------------------
 


Why have HMRC decided to raise an Income Tax Investigation into my tax affairs?


Despite a common misconception that the income tax investigation is a random enquiry nearly all Inland Revenue investigations are conducted because HMRC believe that there is something wrong with your tax affairs.


The process of selecting a case for an Inland Revenue Investigation is quite intense. HMRC have access to information from a number of sources, including banks, local authorities, newspapers, Yellow pages, local directories and of course the internet.


This sort of information will be gathered and stored. The advent of the computerised self assessment method of taxation launched in 1997 means that HMRC have information on their computer system relating to your business on a year on year basis and they are also (due to the trade classification codes that are allocated in every instance) able to compare not only your businesses year on year results but with those in your local area who operate in the same field of business.


In addition the encouragement of informants over the last few years has given HMRC an additional seam of information.


All of these factors are looked at and if HMRC hold some (supposedly) hard information from an informant and there are unexplained differences between your business and that of your local competitors then the likely hood of a full blown Inland Revenue Investigation increases.
This is not to say that the information that HMRC have is correct or that there assumptions are correct it is just to say that they believe that there is the distinct possibility that the accounts and tax returns are incorrect.


I have been Self Employed for a number of years but did not get round to registering tax. What can I do about this and will I face prosecution.


This is a more common problem that many people believe. There are many people who set out as self employed (especially in times of recession and redundancies) and find it a struggle to keep up with all of the paperwork. They often mean to register for tax and then do not quite get round to it as looking after a new business takes a lot of time and effort. Year two will then pass (with the best intentions of registering to pay tax but never quite getting round to it due to other pressures). The individual then often becomes frightened and believes that if they go to the tax man they will get thrown in jail. They then spend the next few years dreading the brown envelope from the tax man hitting their doorstep.


HMRC recognise that there are many people in what they call the Hidden Economy and have a number of “Hidden Economy Teams” around the country who’s sole aim is to bring people back into the tax system.


Prosecutions for this type of offence are very rare and if a person voluntarily comes forward to HMRC to disclose untaxed income for a number of years HMRC normally will accept a settlement to include tax, interest and a penalty.


A problem for many individuals is that business records have not been maintained for the whole of the period. Although this makes the task of preparing the figures more difficult this is not impossible, especially if your advisor has experience of reconstructing past information and estimates.


The main cost, in most instances, of getting back into the system for tax purposes is a financial one. It can be done and once most people have started the process, as long as they have the right guidance and advice they often feel much happier.


Will I be allowed Time to Pay my tax bill?


The real answer to this is that sometimes HMRC will agree a time to pay arrangement with interest charged on the debt. They need to be satisfied that the individual or business cannot raise the funds from other sources and that there is a realistic chance that they will be able to meet any payments due under any time to pay agreement. This can often take significant amounts of time as HMRC are reluctant to agree time to pay if any other option is available and will want very detailed information about an individuals asset position and income and outgoings.


Will HMRC tell me why I am being subject to an Inland Revenue Investigation?


HMRC are very unlikely to reveal any information as to why they are enquiring into your tax affairs. They will occasionally give hints to specialist advisors and accountants and inferences can be taken from correspondence and meetings (if one is held). However, the official line is that they are not conducting and income tax investigation they are merely checking that your return is correct and most people subject to an Inland Revenue investigation will not be told the reason why that tax investigation commenced.


Do I need to attend meetings with HMRC?


The simple answer to this question is that there is no requirement in law for you to attend a meeting with HMRC. This does not mean that a meeting should not take place as long as you are prepared correctly and it is in the your interests to do so.


Do I need to provide my bank and credit card statements to HMRC?


This depends on various different circumstances. If HMRC have not found and errors in your accounts or tax returns then this can be strongly resisted. If there are errors established then HMRC have a much stronger case for requesting them as part of the Inland Revenue Enquiry.
 

[kenaltobelli]

just a point on your thread pure hydro.
the tax man has been told by hm gov to give small business time to pay if they are behind
in affairs. but dont bank on it

[gerard mcmanus]

just say your a bank and they will give you money, i am trying it at my next tax return 

[williamx]

just say your a bank and they will give you money, i am trying it at my next tax return 

I have just gone Limited so I can collect a £6million pension from the taxpayers.

[Moderator David@stives]

Pure Hydro

Great post

[Tosh]

there is also a bit of a difference between taking a run to the shops and not working it in to your accounts that you've used some petrol, than not paying a thing for a year or letting the HMRC know your earning anying or paying ni either 

Listen, I'm an ex-accountant (though not a tax accountant) and from a 'holier than thou' point of view, there is no difference between the two.

My accounts used to be audited once-per-month, with a 'biggy' once a year, and also five 'spot' checks thoughout the year.  It was a fraud prevention thing; in case I was fiddling the books and buying luxury cars with the proceeds; so I know a fair bit about audits, auditing, and the process.  Tax investigations will have a similar process.

But back to vehicle usage for private purposes.

It's wrong and illegal. 

Oh, it's just a trip to the shops, or oh, I had to take my dog to the vet, or I took the van on a three-week-holiday to Italy; though I didn't claim the fuel; but yes, I haven't made any deductions for the road tax, vehicle insurance or capital allowance on the van!

Vehicle usage that you claim for should be for business purposes; and NOT private.

I don't care who you are or what you say, I bet if I looked through your books and bank statements, I could find 'anomolies'; whether you use an accountant or not.

[gerard mcmanus]

What made you change jobs tosh?

You know yourself that the tax office wont give you 100% of your petrol receipts, they will always say we give you 95% because there will be some personally use. So if they are taking that off, why is it illegal to use 5% of your petrol for personal use?

If you use your vehicle for personal use then try and get 100% of your petrol, yes that’s wrong, but I don’t do that, I account for some personal use(as advised by an accountant).

Also although both are wrong they are two different side of the scale, and yes you probably would find something in most, but in most cases they don’t realise or its a genuine mistake that has been made instead of being ignorant to the law, i.e. you pay tax on what you earn.

[Tosh]

What made you change jobs tosh?

I'm a Geordie and my maths is rubbish.

[williamx]

Sounds like you are qualified to run a bank

[gerard mcmanus]

lol me too, that why I leave it to the accountants, capital allowances? - that the tax offices way of not giving your all your tax back on a 10k car right away and giving it over a number of years?

Should we not get interest for that loan  

[gerard mcmanus]

I though it might be something to do with your attire 

[Art]

Art

You might find it hard to beleive but there are a lot of very honest people out there.

If you find this hard to beleive then thats your problem, but dont go accusing us honest tax payers.

Well Dave, if you've never accepted cash for doing a job and not put it through your books then your in a minority.

I never made my previous post to offend anyone, but agree or not, i'd bet that there's very very few on here that haven't or don't put cash straight into there wallet and that includes tips which as far as i know have to be declared.

Arthur

[gerard mcmanus]

shhhhh! there watching 

[Moderator David@stives]

Art

I put all my jobs through George wether they paid cash or not, in fact I actively encourage all my customers to pay bacs or cheque.

[williamx]

The taxman and the goverment are considering outlawing customers paying cash, instead they want them to pay by cheque or bank transfer.

[gerard mcmanus]

that will never happen mate