Chartered Accountants for over 100 years

Chartered Accountants

INVESTIGATIONS

Reasons for investigations.

  • Profits lower than in similar businesses
  • Amounts taken for private drawings which are insufficient to live on.
  • Accounts show unusually high business expenses.
  • Capital introduced with no obvious source.
  • Large amounts of savings exceeding income and private drawings.
  • Other information.
  • Late return of your tax return.
  • Failure to inform the Inland Revenue when you start in business.

Q) What happens in an investigation?

A) An inspector will tell you why he is not satisfied with your accounts. He will ask to see your business and other records. In addition you will probably be invited to a meeting with the inspector.

At the meeting you will be asked for details of how the business is run and how the records are maintained. You are likely to be asked for details of your personal expenditure. Notes will be kept and you can request a copy.

Accountant
All enquiry's will be sent to your accountant who can accompany you to all meetings. THE SERVICES OF AN ACCOUNTANT ARE INVALUABLE IN INVESTIGATION CASES. IF YOU DO NOT HAVE ONE IT IS RECOMMENDED YOU ENGAGE ONE AT THE START OF THE INVESTIGATION.

If the Inspector believes your accounts are wrong he can estimate your profits in two Ways.

  • He may estimate your takings by marking up your purchases.
  • He may calculate your spending and compare it with your private drawings from the business together with income from other sources.

Whatever is done , the Inspector will try to agree a figure with you and your accountant.. If agreement cannot be reached you have the option to take your case to the Commissioners.

 

 

 

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6 March, 2012 10:20 PM