Taxing times

With one eye on getting your business through the pandemic, it would be easy to lose sight of your tax obligations in early 2021. Adam Bernstein issues a timely reminder

Technology has made it easier for HMRC to understand how taxpayers manage their affairs. But consequently HMRC is now more frequently finding errors. While there is not necessarily any suggestion of deceit, it does not hurt to look at the most common reasons for official intervention.

The consequences of failing to keep records can be significant. In a recent tribunal case, a vehicle repairer failed to keep records for a number of years. HMRC raised an assessment of lost VAT amounting to over £46,000 based on only two invoices – the only information available to it over the period. The taxpayer challenged this, but the tribunal upheld the assessment as the judge considered that HMRC had made a reasonable estimate on the limited evidence available.

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