How to avoid a tax audit

How to avoid a tax audit

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Date30 May 2013
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Posted ByAdmin
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Recently, Amazon UK has made headlines for paying a staggeringly low amount of taxes. Last year, the online retailer paid just £2.4 million in taxes on sales of £4.3 billion. That equates to a tax rate of less than 0.1 per cent. Here’s the kicker - Amazon UK actually received more in government grants than it paid back to the system.

Although the company claims its tax rate is so low because the company earns most of its money in Luxembourg, that hasn’t stopped one MP from calling their contribution “pathetic”.

As a result of the controversy, Amazon has made tax avoidance a hot button issue. Labour MP Nick Smith said: “HMRC should be going through this company’s tax arrangements with a fine-tooth comb.” 

Other large corporations are carefully examining their accounts, hoping to avoid a public outcry.

And you should, too. Small and medium-sized enterprises (SMEs) can find themselves in a similar situation if accounts aren’t in order.

To ensure you’re paying under the appropriate tax code, consult an expert in business accounting services. You’ll have the perfect opportunity to do so, as Bradleys Accountants have launched a free tax check event, to be held until the end of June.

Bradleys launched their ‘Free Tax Health Check’ campaign to help SMEs avoid inadvertent tax fraud, a pressing issue for businesses. Bradleys’ practice manager, Alan McCappin, said: “Taxation is complex and can be a nightmare for small businesses to understand; our Health Check will enable a qualified accountant to go over a local business’s accounts to ensure they are a) compliant within HMRC guidelines and b) that they are maximising any savings they can make.”

The event is completely free to attend and will offer a comprehensive overview of your business’s tax compliance. All you need to do is collate copies of your most recent personal tax return, your last set of accounts, a corporate tax return, your most recent payroll summary and the last four quarters of VAT returns. If you are missing some information, don’t worry, you can still benefit from their premium accountancy services. Collect what you can and an expert will analyse your payments to assess whether or not your business is tax compliant. You’ll also be asked some basic questions by a trained member of staff, in order to get a clear picture of your business finances.

In conclusion, an expert will inform you of any errors and you’ll be walked through new tax regulations so you can financially prepare for any upcoming changes.

Mr McCappin added: “Even if a business has been on top of their taxation in the past, new rules are introduced and with the best will in the world, who has time to plough through a 214-page VAT Guide?” Instead, rely on experts to provide you with the most up-to-date information.

“We are hoping that local businesses, especially the smaller ones which may not have the resources to look into this in depth themselves, will take advantage of our offer and make sure they are operating in the most tax efficient, compliant way,” Mr McCappin said.

Protect your business from accidental tax fraud. Although it’s easy to fall under the wrong tax code or overlook a few accounting errors, there’s no excuse not to take advantage of the Free Health Check event.