The HMRC targets family businesses too
Generally speaking, family businesses are not highly regarded by the HM Revenue & Customs. The reason for this is that they are largely seen as a high risk. While it is true that family members who work together cannot function independently, this does not mean that small businesses have the tendency to avoid paying their tax liability. Nonetheless, family-based businesses are viewed as venturesome, despite the good management. Chances are the HMRC will be looking into your company at some given point just to see if you are cheating. Even if you are not lying, it is advisable to team up with HMRC tax investigation specialists. The question is what should you do next?
About tax enquiries
If your family business has come under the scrutiny of the HM Revenue & Customs, you are suspected of tax evasion. It is important to stress that such enquiries are not random and if the Taxman suspects you have done something wrong, he has good reasons to think so. What triggers an investigation are the figures you have submitted. If they are not accurate, you will be targeted by the HMRC. They will first adopt a civil settlement approach, so you should not worry about a criminal investigation. Even if you will not be criminally prosecuted, business and family life will be affected. Having specialists by your side will be helpful as you can get it over with rapidly.
Reduce the risk of an HMRC investigation
Not all enquiries result in serious investigations, but you too have to take measures to avoid this unpleasant experience. So, what can you do? One thing to think about is discussing with your bookkeeper. The government will want clarifications and it is best to determine your expenses. For example, the salaries paid must be solely for business purposes. Even though a trained professional will take a look at your financial records, you still need a fresh pair of eyes. Equally important is to file your returns on time.
Be nothing but honest
Even if your business is being investigated, there is no reason to panic. Even if you have made an error, it is better to admit your mistake. This will minimise the penalty, not to mention that you will avoid a criminal investigation. You should always be honest, meaning that you should not conceal information. By showing that you have nothing to hide, you will avoid serious consequences.