HMRC are clamping down on tax avoidance and as such, you should be prepared for a visit from HMRC at some point over the life-span of the company.

HMRC have introduced a regime of inspections along the lines of VAT inspections.

Everyone should now expect to be visited at some stage and it is important that records are well kept, all invoices and receipts are in place and there are no grounds for criticism. We recommend that you advise us of any proposed compliance visits so that we can support you. Our fees for this support would be based on the time spent, but we do offer a fee protection service, and if you take this up you should not incur any further fees, provided the enquiry is covered by our fee protection terms.

Similarly, you can expect visits from VAT officers and, typically, they will ask to see:

1. Sales and purchase listings
2. Copies of sales and purchase invoices
3. Business bank statements, cheque stubs and paying-in books
4. Copies of VAT returns and any working papers

If any evidence of dishonesty is found, HMRC would probably wish to go back over earlier years and may choose to re-open directors’ personal tax assessments, charging interest and penalties on any unpaid tax.

We recommend taking out fee protection insurance to cover yourself against the additional accounting costs of providing information and defending your position. Competex offers this insurance and will cover all expenses of the investigation for those who subscribe to our policy (in the absence of any dishonesty). We will enlist the help of specialists and handle the investigation on your behalf.