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Warning highlights realities of random tax investigations

  2009 may herald an increase in tax investigations by HM Revenue & Customs and any business owner should consider the potential disruption, intrusion and expense involved, warns Southampton-based accountancy firm HWB.

 From 1 April 2009 the authority already granted to HMRC for obtaining information and documents will be extended and new powers will allow inspectors to visit business premises in order to carry out investigations.  No reasons have to be given despite the fact that, in extreme cases, an investigation could last for more than a year.

 "HMRC will be flexing its muscles on a much broader remit from next spring and any business could be selected for a random investigation, aspect enquiry or dispute in relation to its tax affairs," explains HWB tax director, Tracy Jenkins.

 "In the case of aspect enquiries, inspectors can examine one or more facets of a tax return without viewing all the relevant books and records.  This indicates a more aggressive approach to future disputes and a greater need for the ongoing involvement of experienced professional advisers."

The financial impact on a business selected for investigation can be significant, even if its accounts are found to be in good order and there is no extra tax to pay.  HWB offers its clients a fee protection scheme providing up to £75,000 worth of cover in the event of a full enquiry.  The insurance also includes access to a dedicated Business Support Line offering expert advice on commercial legal issues, health and safety plus employment and personnel matters.

"Random investigations can prove extremely time consuming and expensive.  Our fee protection scheme gives our clients the peace of mind which comes with knowing that we will assist with any investigation into their tax affairs at no additional cost to them.  They have found that instant telephone access to professional support and guidance on health and safety and employment issues is also very useful."

 HWB is one of the largest independent accountancy practices in the region.  The firm offers advice and guidance to a host of small to medium-sized businesses in sectors including construction, healthcare, hotel and leisure, recruitment and professional services.  For further information visit www.hwb-accountants.com or call Tracy Jenkins on 023 8046 1200.