Dealing with HMRC – Is your accountant up to it?

In recent years the approach of HM Revenue & Customs (HMRC) in collecting unpaid taxes has changed significantly. Rather than agreeing payment proposals following discussions with business owners and their accountants, their approach in recent years appears to be much more draconian – pay the penalty then pay up – or else!

From 2015, HMRC will even have the power to access the bank accounts of taxpayers who have been unable or unwilling to pay the tax they owe on time – although this will only apply to those owing more than £1,000 and HMRC will need to ensure £5,000 is left in the individuals account after the overdue tax has been removed from their account, these new powers are far in excess of anything they have ever been equipped with in the past – it is clear their attitude to debt repayment is now much less flexible than it ever has been in the past.

With the introduction of PAYE in Real-Time in 2013, HMRC now also have a much tighter control of the exact amount of Tax and NI you owe from your payroll, meaning they know how much to chase and how much interest to add to any late payments.

Enquiries by HMRC are also on the increase due to enhanced knowledge of late payers and of those whose tax affairs appear ‘inconsistent’. Enquiries will often be at short notice, giving business owners little time to prepare their accounts for inspection and investigation.

It is imperative that business owners engage the services of an accountant who is able to deal with HMRC on a professional and respectful basis yet maintain a strong stance if they feel HMRC are adopting tactics which are either too pressurising, or in some cases, could be described of as a bullying nature.

The key is to accept everything HMRC say at face value. They, like all of us, sometimes they get things wrong, and having an accountant as an ally who is able to make sure they are adhering to the correct procedures, checking they can defend their arguments successfully and are correct in what they request, is extremely important. Some accountants and bookkeepers are pressurised into accepting HMRC’s arguments even though they are incorrect. HMRC will generally develop a respect for an accountant who is able to put forward valid and reasoned arguments in response to an enquiry – so if you don’t think your accountant is able stand up for your business, maybe it’s time to look elsewhere…..

DMF Accountancy does not charge its clients fee protection insurance in the event of an HMRC enquiry. We see this an unnecessary cost to your business for an event that may never happen. In the unlikely event that an HMRC enquiry is requested you can be sure DMF Accountancy will give you all the support and backing your business needs.

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