Why Making A Tax Disclosure Could Prove Best For Your Business.
Whether you’ve recently discovered errors in your tax returns or have made the mistake of withholding information from HMRC, there’s no need to panic when it comes to disclosing new information about your taxes.
In fact, as we covered recently, if you know that you’ve been facing undisclosed tax issues for some time, it could very well be in your best interests to come clean.
Because most importantly?
Whether you’ve been prompted or not, if you make a tax disclosure to HMRC, HMRC will not prosecute. And who wants to go to prison, right?
Of course, this is just one reason you might want to disclose new information to HMRC. Nevertheless, if you’re still unsure whether a voluntary disclosure is right for you, today we’re going to delve into the issue a little further, exploring five reasons why a voluntary tax disclosure could be the best option for you and the future of your business.
So let’s jump into it, shall we?
Still, even if today’s article doesn’t set your mind at ease, get in touch. We’re here to give you peace of mind.
Number 1: Facing The Elephant In The Room.
One of the most common reasons for voluntarily disclosing tax information to HMRC is what might be referred to as the ‘sleepless nights’ effect.
Are you worried about your taxes? Do you think that if HMRC was to look into your returns that they’d find something they didn’t like?
Even if you’ve received no notice from HMRC about a tax investigation or inspection, you may be well aware that your tax returns need a good looking over. But sometimes, the other pressures of day-to-day business can push this concern into the background.
But if you know that you haven’t been totally honest with HMRC, it might be best to rip the plaster off and get in touch. Because if you don’t deal with the elephant in the room, those sleepless nights aren’t going to get any better.
Number 2: HMRC Gets In Touch.
Another deciding factor in whether or not to make a voluntary disclosure may come down to HMRC getting in touch for an investigation.
Whether they already suspect you of potentially fraudulent activity or are simply getting in touch for a random inspection, in these instances, HMRC’s initial contact can act like a prompt to some business owners.
Ultimately, of course, the decision is down to the business owner themselves. But if you’re feeling more than a little guilty when you receive correspondence from HMRC? It might be time to do the right thing and get it sorted.
Number 3: Businesses Have Changed. And So Has HMRC
Whether you like it or not, the business world has changed rapidly over the past few decades, and this is true too for the way in which HMRC and their information gathering techniques work.
What’s more, there’s less and less opportunities for taxpayers to hide their assets from HMRC.
And generally speaking? When it gets harder to hide your assets, some business owners may be tempted to place their money in risky jurisdictions.
Wouldn’t it be better just to have peace of mind and pay what you owe accordingly? We certainly think so.
Number 4: Fun While It Lasted.
In this scenario, business owners may be fully aware that they’d committed fraud by deliberately suppressing information from HMRC.
Furthermore – and linked with the third point above – these business owners may recognise how much harder it has become to keep their earnings a secret.
So in these circumstances, said business owners might be thinking about ‘coming clean’ and settling the liabilities that could adversely affect their business.
And really speaking? This is only for the best. Why risk prosecution when you can get everything out in the open, all above board?
Number 5: The ‘Later’ Syndrome
If you know that you’ve willingly suppressed information from HMRC, it might not have started as a wholly dishonest act.
In fact, chances are, there may have been a very simple and straightforward opportunity to extract money from the business, believing that you would then inform HMRC at a later date.
However, this method often has a snowballing effect. More and more money can be withdrawn as more and more opportunities arise.
Then, you start lying to yourself. You start telling yourself that you’ll still inform HMRC, just that you’ll do it ‘later’.
Of course, ‘later’ often doesn’t come around until it’s too late – until HMRC are already investigating your business.
But as always, it’s worth remembering: there’s another way.
Because if you make a voluntary disclosure about your tax returns? You can put yourself and your business back on track.
Are you worried about making a voluntary disclosure to HMRC?
Worried about an upcoming tax investigation or simply need someone to talk to about your concerns?
Don’t fret. Get in touch. We’ll give you peace of mind.
The Tax Haven.