Tax enquiries take too long for contractors’ liking
The time taken by HM Revenue and Customs to investigate taxpayers has come under scrutiny this week as it has been revealed that it takes an average of three months for the department to conduct their tax probes. This figure shows a significant increase on the length of time required for similar investigations to be completed in 2012-13, when they were wrapped up in around 2.5 months on average.
With the length of time being extended by a fifth, there have been calls for an explanation as to why the time taken has increased. For those who are affected, the extra weeks involved come at a cost to those who are subjected to the process, both in terms of their time and the stress involved. With those who work for themselves being amongst those most likely to be investigated, purely by the nature of their dealings with the department, PFP, who obtained the figures, have pointed out that the increase is a problem which needs addressing.
The length of the investigations is a cause of concern, as is the fact that the department is relying on their recently acquired database system to flag up potential cases of tax avoidance which could be more likely to result in innocent taxpayers being subject to investigations. With the rigidity of the algorithms failing to take into account the intricacies of each individual case, as many as 80 per cent of the leads followed up by the department are now automatically generated.
The increased length of time that investigations take to complete, which often significantly exceed the three month average, combined with the rise in the numbers of taxpayers being investigated has made for a situation which could see this situation becoming more and more of a problem.
Independent professionals can often find themselves confused by the rules concerning contractor tax, running a limited company or issues which often attract the attention of investigators such as contractor expenses but our handy guides are designed to help you understand more about the rules and regulations involved.
For information on how our experienced team could deal with HMRC on your behalf, help you to keep your business fully compliant and save money at the same time, call us today on 01442 275789 or email email@example.com.