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Meantime, here are our top 10 tips to help avoid tax enquiries.

  1. Don't file your return late. The logic is that this is indicative of disorganised affairs and so more likely to contain errors.
  2. Ensure you enter the same expenses in the same boxes each year. For example, a driving instructor putting their fuel cost in the cost of sales figure one year and then motor expenses the next will produce large variations that the Revenue computer will draw attention to. 
  3. Explain any unusual variations in items when the Return is sent in (use the "other information" white space on the Return) to avoid the start of questions about it.
  4. Don't forget to put everything on your return. HMRC automatically receive a lot of information from sources such as banks. If you've forgotten to put the interest received on your return, an enquiry is likely.
  5. Be prepared for questions. If your profits are low, explain how you've been able to support yourself.
  6. Don't upset people who may inform on you. For example, a plumber insisting on payment by cash to a fit a bath that then leaks and won't return to repair, may well find the customer calling the Tax Evasion Hotline. This can now be online as well - HMRC make it as easy as possible and it can be anonymous! Even if the cash is being declared, the customer and HMRC don't know that,  but a tax enquiry is how they'll find out.
  7. Respond to requests for information.  If you do get an aspect enquiry, deal with it as efficiently as possible to avoid it moving into a full enquiry. Bear in mind that your cooperation will count towards reducing the penalty for an incorrect return.
  8. Avoid estimates and round sum figures on the Return. Retain all receipts for business expenses. The Revenue no longer accept estimated figures and are likely to disallow the expenses claimed. It may even encourage them to look at earlier years' returns.  
  9. Show disallowed expenses. It is probably better to show private use adjustments on the Return rather than net them off in arriving at the expenses figure claimed, so that it is clear to HMRC that adjustments for private use of items such as Motor Expenses have been made.
  10. Avoid late payment.   If you are very late you may get a visit from the Collector of Taxes who will see that luxury car in the drive!

In spite of this advice, you may still get a random enquiry. If you do, expert assistance is essential.