The vast world of taxation is currently undergoing a significant shift. Recent data suggests there’s an eye-watering deficit of £5.2 billion between what HMRC should have collected in taxes and what they’ve actually received. Naturally, this discrepancy is propelling HMRC to intensify its efforts. What does this mean for you and us? In short, HMRC is amplifying its investigations, leading to an unprecedented surge in tax enquiries.

 

Why The Increase in Enquiries?

 

The aforementioned £5.2 billion deficit is a principal driving factor. With such a gaping hole in expected versus actual revenues, HMRC is left with little choice but to ramp up its investigation activity. It’s essential to understand that these enquiries are not solely reserved for those who might have suspicious tax activities. Even the most diligent taxpayers, who have committed no wrongdoing, can find themselves under the microscope.

 

What Does an Enquiry Entail?

 

Should you find yourself at the centre of an HMRC enquiry, irrespective of any wrong-doing, compliance is required by law. This means:

 

Submission of Records: Offering up any financial records or other information HMRC requests.

Attendance: Partaking in any meetings mandated by HMRC.

 

The process can be undeniably stressful, time-consuming and costly. What’s more, many of these investigations conclude with HMRC finding no evidence of wrong-doing. However, if discrepancies are found, taxpayers face not only additional costs but potential penalties.

 

Defending Against Enquiries: The Value of Early Expertise

 

From our extensive experience at Lewis Brownlee, we’ve observed that having us in your corner from the very outset is the most effective shield against these investigations. By enlisting our expertise as your accountants early on, you can ensure your tax affairs are exactly as they should be. Furthermore, our clients are able to sign up to our Tax Protection Service, which means they will have us by their side in the event of an enquiry.

 

Benefits of our Tax Protection Service:

 

Expert Representation: Our Tax Protection Service sees our seasoned team, well versed in the nuances of UK tax laws, navigate the intricate paths of enquiries for you.

Cost Coverage: It safeguards you against the potentially high accountancy fees associated with lengthy investigations up to £100,000. Yes – the costs can really go that high, particularly if agreement on a technical point cannot be reached, and a case ends up going to a tribunal!

Peace of Mind: It allows you to sleep easy, knowing that our team is managing the complexities, ensuring you meet all compliance demands and substantially reducing the stress of the process.

In short, as the tax landscape evolves and the intensity of HMRC investigations grows. So, equipping yourself with a Tax Protection Service becomes more crucial than ever. At Lewis Brownlee, we’re here to stand by your side. As such, we’ll ensure you’re not just compliant but protected against the uncertainties of the tax world. So, what are you waiting for? Become a client today and sign up to benefit from our Tax Protection Service. It really is all round peace of mind.

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.

Navigating the labyrinth of the tax world is no simple task. Add to this the possibility of HMRC tax enquiries, and the journey becomes even more intricate. But before you start stressing, it’s essential to understand that having the right support can make all the difference. At Lewis Brownlee, our clients can benefit from signing up to our Tax Investigation Service, which has been instrumental in already helping so many out. Don’t believe us? Here are a few recent case studies we have encountered where the value of our Tax Investigation Service really shines through…

 

Case Study 1: The Overdrawn Director’s Loan accounts

 

The directors of a large construction caught HMRC’s attention due to having significantly overdrawn director’s loan accounts. Whilst it isn’t usually wrong to have overdrawn loan accounts, the authorities see it as a warning flag. So, it raised the chances of an enquiry. Once instigated, this particular enquiry didn’t just stop at the company but extended to the directors’ personal finances as well. Unfortunately, the company was not part of any fee protection scheme. So, the result? Due to the protracted and detailed nature of the enquiry, a lot of time was spent on the matter. Consequently, this led to a significant amount of professional fees.

 

Case Study 2: The Builder’s Ordeal

 

HMRC’s antennas went up when they grew suspicious of a self-employed builder they believed to be receiving undeclared cash payments. What followed was an extensive, invasive, year-long investigation. In the end, the builder was vindicated, with no errors found on his return. However, having not been part of our protection scheme, he was faced with an accountancy bill running into thousands.

 

Case Study 3: Furlough Support Enquiries

 

The recent pandemic saw many businesses relying on furlough support grant claims. We’ve had several clients under this category receive enquiries from HMRC. The silver lining? All these clients had our fee protection cover. We stepped in, offering robust assistance, directly dealing with HMRC, ensuring a smooth process. Best of all, the majority had no expenses from their pocket, thanks to our scheme’s underwriters covering our fees.

 

Case Study 4: The Complex Return

 

A significant capital gain paired with a substantial claim for tax relief on a client’s tax return landed them in the HMRC enquiry zone. HMRC, armed with a plethora of queries, sought detailed supporting information. Thankfully, the client was under our fee protection cover. After significant back and forth, HMRC was satisfied. So, what was the end result? Zero fees for our client, as everything was covered by the underwriters.

 

Why Our Tax Investigation Service?

 

These cases shed light on the unpredictable nature of tax enquiries. By opting for our Tax Investigation Service, you benefit from:

 

Expertise: Our seasoned team navigates the complexities on your behalf.

Protection: You’re shielded from potentially high accountancy fees.

Peace of Mind: With our fee protection cover, most of our clients pay nothing out-of-pocket, even with the most intricate investigations.

 

In the ever-changing landscape of taxes, it’s not just about paying what’s due but ensuring you’re protected if tax enquiries arise. So, reach out to us and discover how our Tax Investigation Service can be your fortress against unforeseen tax storms. We’re always happy to help!

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.

Tax investigations can be a daunting prospect for anyone, whether you’re a business owner, freelancer, or an individual taxpayer. But understanding what happens in a tax investigation can help ease anxieties and better prepare you for the road ahead. Let’s delve deep into the intricacies of these investigations and illuminate how you can shield yourself from potential pitfalls.

 

Triggers for a Tax Investigation

 

HMRC doesn’t start investigations on a mere whim; specific triggers often prompt them. Some common ones include:

 

Sudden Changes in Income or Profit: A substantial increase or decrease from previous years can attract HMRC’s attention.

Discrepancies Between Different Returns: If there’s a mismatch between, say, your VAT return and corporation tax return, HMRC might want a closer look.

Inconsistencies with Industry Norms: If your data deviates considerably from what’s typical within your industry, this could raise a flag.

Late Tax Returns and Payments: Regularly missing deadlines might suggest to HMRC that your financial affairs aren’t in order.

Random Selection: Sometimes, HMRC picks out returns at random for investigation, so you could be under scrutiny even if everything’s in perfect order.

 

The Tax Investigation Process

 

Once HMRC decides to investigate, understanding what happens in a tax investigation becomes pivotal. Here’s a step-by-step breakdown:

 

• Notification: The investigation kicks off with a formal notice from HMRC, detailing what they’re looking into and what they need from you.
• Information Gathering: You’ll need to provide all requested records, which might include bank statements, invoices, receipts, and other relevant documentation.
• Meeting: In some cases, HMRC might want a face-to-face meeting. Here, they’ll discuss your tax affairs in-depth.
• Further Investigation: Based on the information you provide and their initial findings, HMRC might delve deeper, asking for more specific documents or clarification on certain points.
• Conclusion: Once HMRC is satisfied, they’ll wrap up the investigation. This could result in no changes, or they could determine you owe additional tax.

 

Potential Outcomes

 

After understanding what happens in a tax investigation, it’s crucial to know where you might land once the dust settles. The outcomes vary from case to case but generally-speaking fall into one of the following categories:

 

No Additional Tax Owed: If HMRC finds everything in order, the investigation will close without any additional tax payable.

 

Additional Tax and Penalties: If discrepancies are found, you might owe extra tax. Furthermore, HMRC can levy penalties if they believe any underpayment was due to carelessness or deliberate action.

 

Prior year adjustments: If errors are found, HMRC could well extend the investigation back to earlier periods in the hope of obtaining additional tax, interest and penalty charges.

 

Shielding Yourself from Investigations

 

The best way to mitigate the stress and uncertainties of a tax investigation is naturally to have had professionals looking after your affairs from the outset? Prevention and preparation are nearly always key to the success stories around tax investigations. Employing a reputable accountant from the outset ensures your financial affairs are in impeccable order. Furthermore, partaking in Tax Protection Schemes offered by accountancy firms (like ours) can offer invaluable benefits including:

 

Expert Assistance: You’ll have experienced professionals guiding you throughout the process.

Cover for Costs: Tax investigations can be lengthy and expensive. These schemes often cover accountancy fees.

Peace of Mind: Knowing you’re protected and have experts by your side significantly reduces the stress and anxiety associated with investigations.

 

So, while the prospect of what happens in a tax investigation can be daunting, being well-informed and having the right protections in place can make all the difference. With the right expertise and safeguards, navigating the choppy waters of tax investigations becomes a much smoother journey. We would love to help you there! So, why not call us today on 01243 782423, and take us up on one of our free introductory meetings to see what we do and how we do it! You have nothing to lose and potentially everything to gain 

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.

As a business owner, managing your finances and cutting costs is essential to your success. One of the best ways to save money is by taking advantage of various business allowable deductions. These deductions can help lower your taxable income, ultimately reducing the amount of tax you owe. In this blog post, we will delve into different types of allowable business deductions, discussing the business needs associated with each and their benefits. We will also offer tips on keeping accurate records to maximise your tax savings.

 

Pension Contributions:

 

Pension contributions made for both you and your employees and can be deducted from your taxable income. Retirement benefits can help you attract and retain quality employees, creating a more stable and loyal workforce. However, please remember that there are different types of pension plans available, each with their own tax nuances, so please discuss these with your Independent Financial Adviser or plan administrator.

 

Relevant Life Policies:

 

Relevant life policies are another way to help your employees while reducing your taxable income. Paying premiums for relevant life insurance policies provides a tax-efficient death-in-service benefit for your employees. In addition, these policies can serve as an additional perk for your team members, offering financial security for their families. In turn, this enhances your employee benefits package and further reduces your taxable profits.

 

Accelerated Asset Purchases:

 

Sometimes, purchasing assets like equipment or machinery in the current year instead of delaying until just after your accounting year end, can lead to accelerated tax deductions. For example, expediting asset purchases can be necessary to meet growing demand or replace outdated equipmentbut claiming these deductions immediately, can improve your cash flow and reduce your taxable profits for the current accounting/tax year.

 

Research and Development Expenses:

 

Investing in research and development (R&D) can benefit your business in the long run and offer tax-saving opportunities. Costs associated with R&D can be deducted from your companies taxable profits, encouraging innovation and growth. The benefit of claiming R&D expenses is two-fold: not only do you lower your taxable profits, but you also invest in the future success of your business.

 

Home Office Expenses:

 

If you run your business from home, you can claim a portion of your household expenses as business costs. By claiming home office expenses, you can lower your taxable income while reducing your out-of-pocket costs for running your business.

 

Training Expenses:

 

Investing in employee training can lead to long-term benefits for your business. Training costs are tax-deductible, so you can offer your team members opportunities for professional development while reducing your taxable profits. In addition, training can help your employees develop new skills, enhance productivity, and create a more motivated workforce.

 

Keeping Accurate Records:

 

To make the most of business allowable deductions, it’s vital to maintain proper documentation of your expenses. Accurate record-keeping will help support your claims when filing your tax return and can also be helpful if your business is ever subject to an audit or HMRC compliance check. In addition, you can use a business expense log or accounting software to track your expenses, ensuring you are prepared to claim your allowable deductions with confidence.

 

Understanding and utilising allowable business deductions can help you save money on your taxes and, ultimately, boost your business’s financial health. You can make the most of these tax-saving opportunities by staying informed and keeping accurate records of your expenses.

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.

In the UK, many individuals and businesses may overlook the importance of a mid-year tax review. The lure of focusing instead on the year-end tax rush can be all too tempting. However, a mid-year check can play a crucial role in your financial planning and help you avoid unexpected tax liabilities. That’s why we’re hoping to explain why paying your tax affairs some attention in the Summer really does deserve your attention.

 

The Importance of a Mid-Year Tax Review

 

A mid-year tax review allows you to evaluate your current tax situation and adjust your strategies to maximise savings. It’s during this review that you’ll have the opportunity to predict your income and expenses for the year, giving you ample time to prepare for potential tax liabilities.

 

Benefits of a Mid-Year Tax Review

 

1.Tax Forecasting:

 

By conducting a mid-year tax review, you can forecast your tax liabilities for the year. This can help you set aside the required funds, avoiding any surprise tax bills and subsequent penalties for late payment.

 

2.Tax Planning Opportunities:

 

A mid-year review provides a chance to identify tax-saving opportunities. For instance, you might realise you’re eligible for certain deductions or tax credits that you hadn’t considered before. You might also discover that you could benefit from delaying or accelerating certain income or expenses from one tax year to another to take advantage of lower or higher tax rates.

 

3. Ensuring Compliance with New Tax Laws:

 

Tax laws are frequently updated, and staying abreast of these changes can be challenging. So, the extra review will give you the opportunity to ensure your compliance with the latest regulations, thus avoiding potential penalties or compliance checks.

 

4. Time pressure

 

If you wait until end of the tax year to review your tax planning, you may find that you do not have enough time to take action. If that is the case then you may miss out on significant tax savings.

 

Taking Control of Your Financial Future

 

Taking the time for a mid-year tax review can make a significant difference in your overall financial health. It not only helps in tax forecasting and finding new tax-saving opportunities but also ensures you’re up-to-date with the latest tax laws. Engaging professional accountants (like us!) for this review can further optimise the process, ensuring you’re on the right path to a stress-free future.

 

So, there we have it. The importance of thinking about tax in the Summer sun cannot be overstated. It’s a proactive measure that gives you greater control over your finances, reduces tax-related stress, and could even increase your savings. So, why wait for the year-end rush? Give us a call today and together, let’s make a difference that really counts to your finances.

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.

In tax world, we often look at whether people are fully utilising dividends to lower their tax bills. Funnily enough, in more cases than not, we find people aren’t! It’s certainly a crucial question to consider for anyone seeking to optimise their financial strategy. Indeed, leveraging dividends effectively can play a significant role in lowering your tax bill. So, while it’s a strategy that many overlook, it’s part of the bread-and-butter tax-related best practice that can pave the way to success. So, here are some points you might want to consider.

 

Understanding how dividends work

 

Understanding how dividends work is the first step in maximising their potential. Dividends are payments made by a company to its shareholders, typically in the form of cash. When utilising dividends strategically, they can significantly contribute to minimising your overall tax liabilities.

 

It’s essential to remember that the UK tax system treats dividends differently from salary or business income. There is a tax-free allowance up to a certain limit, followed by a basic rate, higher rate and additional rates for larger amounts. The rates of income tax for dividend income are lower than those of employment income. Therefore, by utilising dividends as a part of your income, you can potentially reduce the amount of tax payable compared to taking all income as a salary. Ultimately, this could mean you have a greater net ‘take home’ by utilising dividend income.

 

Utilising dividends

 

It may still be appropriate to take a nominal salary as well as dividends to reach an optimal, tax efficient, remuneration strategy as well as maintaining your national insurance record.

Tax planning involves a delicate balance, and every individual’s situation is unique. That’s why professional advice is invaluable when it comes to utilising dividends to lower your tax bill. Whether you’re a new investor or an experienced business owner, reputable experts (like us!) can help guide you through the complexities, ensuring you’re taking full advantage of the opportunities available to you.

 

Finding help with lowering your tax bill

 

Understanding and utilising dividends effectively can transform your financial strategy, acting as a potent tool for lowering your tax bill. Armed with the right advice and a robust approach, you can not only increase your earnings but also significantly reduce your tax obligations. As experts in the intricate world of UK tax, we’re here to navigate these complexities with you, ensuring you fully harness the financial opportunities at your disposal. So, if lowering your tax bill is something you’d like to find out about, look no further! Please do get in touch – we’d be happy to see how we can help!

If you’d like to speak to one of our experts about your accounts, please call 01243 782 423, or email from our contact page and we will be in touch!

We also update our YouTube Channel regularly with new content, see here: Lewis Brownlee YouTube channel.