TheTaxInspector.com

Pre-emptive Tax Investigation Advice brought to you by TaxSense Why wait around wondering if you are to be the next tax investigation statistic. Tax investigations don't happen randomly, most are precipitated by something that you have done. We know what attracts the taxman's attention, we call these red flags. A TaxSense pre-emptive tax investigation will show up any 'red flags'. We will advise you how to get your tax affairs in order whilst staying below the tax radar.

What every tax payer should know

According to recent figures in the UK the Tax Man starts each week on average seven thousand, four hundred and thirty five investigations - 7435. That's over 386,000 new cases launched each year.

The self employed and small business sector pays out hundreds of thousands of pounds each year in fines, back tax payments, penalties, interest and accountant's fees.

What are the potential effects of a tax investigation? If you aren't prepared then the effect on you can literally be devastating. Worse still you can face bankruptcy, Police investigations and even go to jail.

Rarely are Tax investigations launched randomly, most are precipitated by something that you have done. By carrying out a pre-emptive investigation of your financial records, we are able to weed out the tell-tale 'flags' in your accounts which will have an investigator all over you like a rash.

If we notice any serious issues that might show up in a typical tax investigation we can propose corrective action. That advice alone could save you thousands of pounds in tax penalties and interest payments.

What can I do to prevent a Tax Investigation? The taxman has access to powerful Government computers which can pick up on "red flag factors" which could trigger an investigation.

Seemingly innocent actions like moving house or buying a second property could place you right in the firing line for a detailed investigation.

TaxSense can advise you on the best ways to legally avoid actions that might inadvertently 'Red Flag' you to the taxman.

By far the most popular approach is to bury your head in the sand and hope that the Taxman never calls.

The possible effects of tax investigation might make a compelling argument for 'keeping your head down'. However, the ostrich approach is not going to be of any use when the Taxman selects you for investigation.

Rather than waiting for a tax investigation, the issues need to be dealt with now. TaxSense are able make sure that your records are up to date and in good order. Once this is done then the argument for 'keeping your head down' is a good one. This is achieved by taking steps to effectively wipe you right off the investigators radar. However, if after following our advice he still attacks, your financial accounting records will be in better order and you will have less to fear.

What happens if the Taxman investigates me? As soon as you receive an investigation notice you need to take professional advice. TaxSense can advise you on how to respond if you get an investigation notice from the Taxman. We will make you aware of the tricks and techniques an investigator will use to back you into a corner both in writing and in an interview situation. We will help you to prepare for an investigation, what you should say and do. Importantly, we advise you, what you should avoid at all costs.

TaxSense Tip 

Avoid tax investigations in the first place by carrying out a TaxSense Pre-emptive Tax Investigation

I'm OK I've covered my tracks Many people who thought they had covered their tracks and placed assets out of reach have experienced a very nasty shock when they found out the information sources that tax inspectors have access too. They have discovered first hand the truth about the real powers of taxman.

What happens if I get caught for underpaying my taxes? Unfortunately, to find yourself in this situation means you have ignored the advice given on the TaxSense webiste or you left it too late before you found us. That said, even in this dire position TaxSense have information that could save your home, your business and keep you out of jail!

Getting caught is very costly, because it leads to the business owner paying all the tax that was originally due, plus interest, plus penalties, plus accountants fees. Because you never know when you are going to get found out, you can't control when this might happen. As we all know from painful experience bad things tend to happen at the most inconvenient times. If this happens and the business owner can't pay they risk losing their business, home, going bankrupt or could even go to jail.

Sadly, when we go back to the very start of the tax evasion. It is quite often the case that had the full tax breaks been claimed, much of the under paid tax wasn't owed in the first place. All that worry, fear and stress for nothing.

This situation happens to people for many reasons. A few people deliberately set out to evade paying tax. More often than not people find themselves in this position to a certain extent by accident. They make mistakes entering figures into their accounts, this might be under declaring their earnings and subsequently under declaring their tax. If you find that you have made a genuine mistake then the best course of action is to sort it out sooner rather than later. I have seen the light kind of a picture

TaxSense accountants can help get your tax affairs in proper order Firstly, if you are like most business owners, you have always done your best and filed your tax returns correctly, but would like a second opinion. A TaxSense full check of your tax records will confirm the true state of your tax affairs. Enabling you to focus fully on building your business.

Secondly, if you think you have made mistakes on your tax returns and the fear and worry of what to do is getting too much to bear. A TaxSense Pre-emptive Tax Investigation will flag up any issues, and enable you to bring your tax affairs up to date. This could help reduce any penalties and interest payments for none or late payments. But, perhaps most importantly you can rid yourself of the fear and worry of being found out.

Thirdly, if you are already under investigated by the Inland Revenue, as well as guiding you through the investigation procedures, we can apply all the tax breaks to your tax bill and re-calculate it based upon what it should have been, which could reduce the amount you have to pay. As well as negotiate with HM Revenue and Customs on your behalf.

It makes TaxSense!


The Inland Revenue have a duty to collect all the taxes that are payable by every UK citizen, that is their job. You have a duty to pay all the taxes that are due. If you don't pay tax that is rightfully due then you are breaking the law. If you are found out then you risk severe financial penalties and could even go to jail.

That is why it is so important to know what the legal tax breaks are and how to use them to reduce your tax bill. Part of our job at TaxSense is to keep up to date with the latest tax breaks and look to implement them where they apply to you and your business. Our job is to help you reduce your tax bill.

How much Tax should I be paying? You might be surprised to hear that some businesses rather than paying too little tax are in fact paying too much tax. The reason for this is that the Taxman often relies on you NOT knowing the tax breaks that are available to you. Our job is to find the little known legal tax loopholes, which drive the inspectors crazy and because they know they can't do a thing about it they're desperate that you don't discover them.

Self-employed business owners rarely have spare time to spend on recording accounting information. Few can afford a full-time member of staff to maintain the business financial records. Having the right information to hand is vitally important when dealing with taxes. The right information will help prevent overpaying taxes. Taxsense bookkeeping service will help keep your business up to date on the latest tax breaks that apply to your business.

Construction Industry Scheme (CIS) Construction Industry Scheme (CIS) Administration Construction Industry Scheme (CIS) Refunds Capital Gains Tax Corporation Tax Inheritance Tax

Business Tax Tax Rebates National Insurance Contributions (NIC) Pay As You Earn (PAYE) Payroll Self Assessment Tax Returns

Personal Tax Value Added Tax (VAT) Revenue Tax Investigations VAT investigations Working Tax Credits Salary and benefits in kind

VAT inspections are carried out regularly to check that you are administering your VAT account accurately. You will be billed for any VAT under-payments that are found. Many business owners not realising that they don't have to accept the Vatmans assessments, pay these bill without question. Business owners are entitled to challenge any assessment decision and can take the dispute to a tribunal. If requested Taxsense can attend any VAT inspection meetings (including representing you at a tribunal) and make an evaluation of what VAT is due.

For most businesses if you invoice over a specific limit (05/04/2008 £67,000) then you should register for VAT. If you invoice above this amount and don't register then if the VATman finds out you could be liable for VAT on all the invoices you have issued after that date. It's just not worth the risk, if you think that you are likely to exceed the minimum turnover for VAT registration in the next 12 months, then TaxSense can advise you on what action you should take. There are special schemes for some types of business and we can advise you on how these schemes might apply. - Taxsense VAT services

A tax rebate is a refund of tax which has been overpaid. There are a number of reasons why tax may have been overpaid, including:-

• you start a new job and are taxed under an emergency code for a while
• your circumstances change, for example, you marry, form a civil partnership, reach retirement age or become a single parent
• HM Revenue and Customs sends the wrong tax code to your employer
• HM Revenue and Customs made an assessment, for example, for a self-employed person, which was too high
• you are not a taxpayer, but have had tax deducted from your building society or bank interest
• you are a CIS sub-contractor paid 'under deduction'.

From your records TaxSense can calculate the value of any over payment that you have made and help you re-claim it.

CIS applies to all businesses in the Construction Industry. Despite a recent overall of the CIS system by HMRC many contractors and sub-contractors are unsure how they should operate within the system.

The taxman makes regular inspections of contractors and severe penalties will follow if the CIS tax law isn't applied correctly. Whether you are a contractor or sub-contractor TaxSense can help make sense of the CIS tax maze. More information on CIS - Click Here

Income tax Arrears

If you have arrears of income tax, you should contact TaxSense as soon as possible.

If I do nothing will they leave me alone? The simple answer is no, they won't leave you alone. The longer you leave these issues the more it is going to cost you, and the more dangerous the potential consequences are to you and your finances.

If you don't pay your income tax, or don't come to an arrangement with HMRC to pay off the arrears, the consequences could be very serious. HMRC might:

• Apply to the magistrates' court if your arrears are £2000 or under. The court will send you a summons. This is an order to make you go to court for a hearing where they will usually order you to pay back the arrears and costs. If you pay before the hearing, no further action will be taken against you. However they do have the power to send you to prison for non-payment of the arrears but this isn't common unless you ignore the summons. The magistrates' court can't be used if your arrears are more than one year overdue
• Come to your home to take away your belongings and sell them to raise money for the arrears. HMRC officers are not allowed to force their way into your home but if they can't get in without force, they may apply to the magistrates' court for a warrant which will allow them to break in.
• Make a claim in the county court against you. If you don't pay, this will make it difficult for you to get credit in the future and also they can then take further steps against you, so you could even end up losing your family home.
• Make you bankrupt. If you've been in arrears for some time or owe £750 or more, issue a statutory demand. This is the first stage of making you bankrupt. If you're made bankrupt, you can lose your family home. If you get a statutory demand from HMRC, get help from an expert debt adviser straight away.

TaxSense can help advise you on how best to calculate and repay any tax arrears.

What can I do?

If you're told you have arrears of income tax, you should always check the figures. Because the tax system is so complicated, it's not unusual for tax demands to be wrong or out of date. You should:

• Check to see if HMRC have made any mistakes in the amount of money they say you owe. If the arrears are the result of official error, HMRC will have to write off the arrears
• Check if you can reduce the amount you owe by making a claim for tax allowances or reliefs. You can claim tax allowances and reliefs for up to six years after they were due. Sometimes, HMRC will put off taking action against you while you see whether you can claim for back-dated reliefs and allowances.
• If you believe your income tax has been wrongly assessed or based on estimates, you should contact Taxsense without delay we can do all of this with you.

If you've checked your figures and accept that you do owe the money claimed, draw up a budget. This will show you how much money you have left after paying essential household expenses like housing costs and food. You will then be in a position to try and come to an arrangement with HMRC to pay off your arrears. You should remember HMRC will nearly always refuse any offer you make to pay off only part of the debt.

Contact TaxSense for advice on how to deal with tax arrears.

If you live outside our immediate geographical area, don't worry we are very effective at helping people using the telephone and email. Our 'Distance accounting' systems are designed to work with people who operate in any area of the UK. We also visit many areas regularly and can arrange a face to face meeting at various times of the year.

We understand that to maintain a happy relationship with our clients we need to be accessible and keep in regular contact. By doing this we are always local to you and can deal with all your accountancy needs.