Insurance is not perhaps the most exciting
topic to think about yet many businesses
do consider insurance to be essential in
order to protect them against significant
but unforeseen expense. Insurance
protection against fire or burglary, for
instance, has long been considered part
and parcel of business life. Such policies
guard against unforeseen or unexpected
events but businesses can now also
be insured against an event, which is
becoming increasingly common and not
so unexpected – a tax enquiry from the
Inland Revenue. The best advice is to
be prepared – otherwise it could cost you
thousands of pounds.
An increasing number of businesses,
including sole traders, partnerships and
limited companies, are receiving enquiry
notices from the Revenue. These enquiries
can consist of a request to review all of the
business books and records, including bank
statements, sales records and all expense
receipts. Any perceived weakness in the
records will be seized upon by the Inland
Revenue and additions to profits or disallowed
expenses may be sought. The best defence
against such notices is to use an experienced
accountant or investigations specialist. This
will ensure you are adequately represented
but the fees can be considerable – far more
perhaps than dealing with the costs of a
burglary. Yet which type of insurance policy is
more commonly held?
PAYE or VAT disputes can also be covered
under the policy. These disputes can be
very drawn out and expensive if lost.
Many people are only moved to take
insurance out when they see others needing
to make a claim. How many people feel the
need to review their house insurance only
when next door is burgled?
The Revenue have targets to collect more tax
in over 80% of full enquiries...and that is before
the cases have even been selected. So much
for being innocent until proven guilty!
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