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HMRC doubles self-assessment taxpayer investigations

Consider this your warning: the number of investigations by HM Revenue & Customs into self-assessment taxpayers doubled over the course of 2013.

If there was any time to find a good contractor accountant it’s absolutely now considering how HMRC is positively gunning for anyone with even a hair out of place on their self-assessment tax returns. More than 237,000 Brits had their tax affairs looked into in 2013 according to recently released figures; compare that to the 2011-2012 tax year where only 119,000 or so individuals had to deal with the taxman’s tender ministrations and the writing is on the wall in big bloody letters, and those letters read ‘RUN!’

Truth be told this has been coming for quite some time. The tax authority has its marching orders from the Government, and they consist of ‘squeeze every rock in the UK until it bleeds’ in order to fill the Treasury’s coffers with as much cash as it possibly can. With HMRC’s focus on rooting out what it refers to as ‘overly aggressive’ tax avoidance – and with much of that tax avoidance taking the shape of schemes like contractors using disguised employment or using personal service companies to effectively launder their cash overseas the taxman is keen to stamp it out at every opportunity, and that means investigations have been increased by a substantial margin.

Of course the majority of freelancers and contractors in the UK don’t engage in any of that sort of rubbish but HMRC is convinced that it needs as wide a net as possible. Even if you’re not doing anything untoward even the smallest inaccuracy or accidental omission on your taxes will bring the fury of the tax authority down on your head, so do yourself a favour and make sure absolutely everything is sorted before submitting any self-assessment documents. If needs be get yourself an accountant; even if it’s prohibitively expensive it’s shedloads less financial pain than having HMRC actively combing through your financial details and charging you fixed penalties left and right.

Yes, it’s incredibly inconvenient and terribly unfair, but this is the post-recessionary world we live in now and it’s certainly not as friendly to small business owners as you would think it should be. It’s not our fault that the Treasury bleeds cash like a stuck pig – we just have to pick up the pieces.

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