How to Avoid Tax Investigations

The following guidelines should help you to avoid a tax investigation:

  • Complete file accounts, returns and statutory forms on time.

  • Avoid using estimated or provisional figures.

  • Make use of disclosure boxes to explain major changes in any year which may have resulted in 'blips' (e.g. large amounts of interest received as a result of major inheritance or significant leap in turnover due to 'one-off' major order, etc.).

  • Keep good and up to date records for the requisite amount of time (just under six years for a business and just under two years for an employee or non-business taxpayer).

  • Avoid using company funds to pay personal expenses.

  • Never pay round sum expense allowances.

  • Try to avoid paying or being paid in cash.

  • Undergo periodic 'health checks' to ensure systems are regularly updated and keep pace with growth in turnover.

  • Never backdate paperwork.

  • Never take actions retrospectively.

  • Never push income into a subsequent quarter, month or year by delaying raising an invoice etc.