Inland Revenue Investigations
|
"Under self
assessment, the Inland Revenue have the right to take random
checks on tax returns and accounts."
|
Previously the Inland Revenue had to show that there was 'due reason'
to investigate someone's tax returns or accounts, but under new
self assessment procedures, this is easier for them. Now they can
take a random sample of returns and accounts as well as those
which they are suspicious about.
They mainly look at Gross Profit Percentages (GPPs)
of a business and how this is affected by current trading conditions.
It should be noted that the Inland Revenue also compare 'suspicious'
people to what they regard as similar businesses in the local
area, and also in the country as a whole.
The Inland Revenue are highly suspicious of cash businesses as
they fail to have a sufficiently good audit trail. This is where
having a good accountancy system will help you enormously and keep
you away from such suspicions.
The Inland Revenue tend to build successful cases against people
who do not use double-entry book-keeping and have gaps in their
information. Academy Accounting Ltd work with clients to ensure
that every bit of information which should be there, is there.
|
