And why it pays to face facts about your tax records.
Time is money; it might be one of the oldest clichés in the book, but when it comes to your business, it’s a cliché for a reason. And if you’re facing a tax investigation or have just received an enquiry notice from HMRC, there might well be a few primary concerns keeping you up at night. One such example?
‘Just how far back are they going to go?!’
Well, there’s good and bad news, we’re afraid. But if you’ve been keeping up with our previous articles – if you’re getting yourself prepared?
There’s no need to fear. Because we’ve got your back.
Still, if you want a little peace of mind? Today, we’re going to reveal all, filling you in on just how far back into your records HMRC will go. And soon enough? You’ll be financially stable and sorted once again.
You’ll be able to focus on what’s important to your business.
But why me? Why are HMRC getting in touch in the first place?!
Another cliché for you – but like the first, it’s a cliché for a reason: ‘There are only two certainties in life. Death and taxes.’ And if you’re running a business and earning a profit? Well, you should already see where we’re going here. Because tax is a fact of life.
And whether you’ve been submitting your returns on time or have missed the cutoff entirely, HMRC are going to find out.
Now, maybe HMRC are getting in touch because they think there’s a fault with your record keeping. Maybe, they think there’s a simple mistake or a miscalculation. Or maybe, even, they suspect foul play.
But either way, don’t panic. And don’t take any accusations personally, either. The only thing to remember is that this process is going ahead. You can either be polite and compliant, or cause further problems down the line.
But how does the tax investigation process actually work?
If you want a more in depth look at how the process works, feel free to check out our previous post on the topic.
That said, if you’re in a panic about how far back HMRC are going to go?
The quick answer: 4 years. More often than not.
But if you’ve obviously been slapdash with your accounts? Then, HMRC will go back 6 years.
And, worst of all – for obviously deliberate tax evasion – HMRC will go as far back as 20 years.
So if you’re thinking of closing a company or you know you’ve made mistakes that need to be disclosed? Remember: HMRC may choose to reopen previous tax returns if a closed company seems suspicious.
So let us know about it. Because we can help fight your case.
So what can we take away from this if you’re facing a tax investigation?
To conclude, when it comes to an investigation or inspection of your tax returns and just how far back your officer will look? Your case is unique, so there are no hard and fast answers to be had. Not until we know the full extent of HMRC’s intentions, at least.
But with all that said? Prepare to be investigated as far back as four years in most cases.
And at the other end of the scale? Up to twenty years.
Of course, no matter how big or small your investigation might seem, it always pays to be prepared. So get reading our FAQs for more information.
We hope you found today’s article useful. But if you’re still a little uncertain about how to progress?
Get in touch. We’ll give you peace of mind.
The Tax Haven.