HMRC Risk-led enquiries

Bevan & Buckland AccountantsHMRC Risk-led enquiries – just from their adverts it can be seen that HMRC’s attitude has changed!

HMRC has the right to investigate any tax return submitted by any taxpayer. They have considerable powers to inspect documents and to ask questions.

HMRC does not need a reason for an investigation. It selects some returns at random so an investigation does not necessarily mean that you are suspected of doing anything wrong.

The procedures for tax investigations are formal and subject to a code of conduct. They can often arise from a ‘discovery’. This includes situations where HMRC has discovered information not properly entered on your tax return. A discovery can extend the period HMRC have to investigate.

If you are contacted by HMRC about a tax return, you should contact us to ensure that the matter is dealt with properly.

Reducing the risk of an investigations

As some investigations are conducted at random, you can never completely escape the possibility of an inspection. However, most investigations, particularly the more detailed ones, arise because HMRC has concerns about a tax return.

The following steps should help avoid an unnecessary enquiry:

1. Make sure your returns are correct

Ensure that the arithmetic is correct, that the amounts relate to the right year and that all figures have been put in the appropriate box. If sending a paper return, make sure you have signed it.

2. Keep copies and documents

Keep a copy of the return with all the working papers to show how every figure on the return has been calculated. Along with supporting accounts and all documents for at least six years.

3. Record queries

If you have raised a query with HMRC, keep a note of it with your tax papers. If the query was made by telephone record the name of the tax officer, their department, the date and time and a note of what was said.

4. Check your figures

Compare the figures for turnover and profit with the previous year and with comparable trades. If there is a significant difference, ensure that you know why.

5. Contemplate full disclosure

Consider if any disclosure needs to be made in the ‘white space’ on a tax return. This is where you may disclose any other information. If you make a full disclosure in this space, it can restrict the right of HMRC to investigate, as HMRC cannot ‘discover’ what you have already told them.

6. Check your bases

Check the bases you use for determining the tax treatment. Do not assume that a basis is correct just because you have used it for many years without HMRC querying it.

hector the tax inspector

What happens in an investigation?

You should contact us immediately if you receive an enquiry letter from HMRC.  If it is a routine enquiry, we can ensure that any questions are answered promptly and fully.

HMRC can impose penalties for mistakes.  The size of these penalties depends on:

  • whether the mistake was careless or reckless
  • whether it was concealed or voluntarily disclosed
  • how much you cooperate with HMRC

The tax payable plus interest and penalties can be a large figure.  We may not be able to avoid penalties but we can ensure that the penalty is minimised as much as possible.

We can also ensure that HMRC does not demand to see papers that are protected by legal privilege.  HMRC is not entitled to go on a ‘fishing expedition’ to see if it can find evidence of underpaid tax.  There have been cases where taxpayers have successfully challenged HMRC’s demands for documents.

Conduct of an enquiry

HMRC will, generally, carry out enquiries where one of three things is suspected:

  • fraud
  • fraud and avoidance
  • serious fraud

HMRC will tell you if they suspect fraud.  If they do, they usually do not tell you what is suspected or what evidence they have for their suspicion.  Instead you are invited to make a disclosure of any irregularities you are aware of.  It is a final opportunity to ‘come clean’.  Where HMRC suspects fraud, it is essential that you obtain professional advice.

Tax evasion is a criminal offence for which offenders can be imprisoned and get a criminal record.  HMRC often prefers to use a procedure known as ‘civil investigation of fraud’.  Under this, a taxpayer who cooperates may be fully able to avoid criminal action.

How to survive an investigation

The following should help you when being investigated:

 

Be calm, polite and cooperative

A taxpayer who is agitated, impolite or uncooperative could be seen as having something to hide.  Such behaviour undermines the credibility of evidence.  Politeness makes it more likely that HMRC will listen sympathetically to what you have to say.  Cooperation can reduce the amount of any penalty, sometimes to zero.

Be honest and complete in disclosures

If you are open in admitting your mistakes, you make it more likely that your other comments will be believed. One of the worst things to do is to make a partial admission while holding something back.

HMRC may have information about you that it has not disclosed, such as other shareholdings or properties.

Get your facts straight

Do not change your story or be vague.  For example, if money has been paid to a director, be clear whether this is salary, dividend, loan, loan repayment, rent, expenses or something else.  Ensure that your records support this.

If a document is missing, recreate the original, stating that it is re-created, and include as much detail as can be provided.

Remember that verbal evidence is still evidence.  Normally your accountant will speak for you but ensure that you have someone who has a good command of the facts.  It is helpful to produce a timeline of what happened and when.  You should know why all decisions were made. Have your documents ready in an indexed bundle.


Tax Investigation Service

Tax investigations can be expensive, even if you are cleared or are subject to a random inspection.  In addition to your own time and the disruption to your business, there can be accountants’ fees, which can become significant.

We offer a Tax Investigation Services to meet the cost of HMRC investigations with business cover starting from as little as £11.56 plus VAT per month.

Please get in touch if you would like to discuss any aspect of tax investigations.

If this applies to you please contact Bevan & Buckland, or Lee directly using the details below, as soon as possible.

Lee Bradley
Tax Director
01792 410119

email: lee@bevanbuckland.co.uk

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

HMRC u turn on NIC for pharmacies

Bevan & Buckland AccountantsHMRC U TURN ON £2,000 NIC ALLOWANCE FOR PHARMACIESSara, Bevan & Buckland

It has recently been announced that HMRC have reversed their decision to exclude independent pharmacies from the new £2,000 Employer Allowance writes Sara Dennis, Pharmacy
Specialist at Bevan & Buckland. She goes on to explain that originally independent pharmacies were excluded from claiming this allowance because they carried out more than half of their work for the NHS and were therefore deemed a public sector business.

Numerous Pharmaceutical organisations have been campaigning for this and they have now been successful.

Sara concludes that this is great result for independent pharmacies as the £2,000 saving can help with cash flow and be reinvested in the business.

Bevan & Buckland have both experience and expertise in dealing with all types of accounting and taxation matters effecting independent pharmacies, please do not hesitate to contact Sara on the following:-

Telephone number – 01792 410100

Email address – sara.dennis@bevanbuckland.co.uk.

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

What do we do? – The Audit Department

Bevan & Buckland AccountantsEver wondered what a firm of chartered accountants does? 

As one of the leading accountancy firms in Swansea & West Wales, Bevan & Buckland get asked this question on a regular basis.  We have therefore put together a short series of blog posts to explain the wide variety of work we carry out, starting with our Audit department.

What we do:

  1. Statutory accounts preparation for:
    • Charities
    • Sole traders (minimal)
    • Partnership (minimal)
    • Limited companies focussing on larger companies, research & development companies and groups.
    • IFRS companies
  1. Audit of the financial statements for:
    • Charities
    • Limited companies
    • Housing associations
  1. Other specialist audits:
    • Solicitor accounts rules (SAR) audits
    • Licensed conveyancers audits
    • Client money audits
    • Welsh European Funding Office (WEFO) grant audits
    • Communities First grant audits
  1. Other ad hoc work
    • Service charge certificates
    • Cash flow forecasts
    • Due diligence work
    • Company valuations
    • Risk assessments
    • Statement of affairs
    • Management accounts/reporting
    • Sage integrated reporting
    • Clients’ Sage re-builds
    • Assistance with software packages
    • Training courses for clients covering trustee training, basic book keeping, charity accounts etc

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

R&D Tax Relief – Budget change

Bevan & Buckland Accountants logoR&D Tax Relief – Budget change will increase cash claims for loss making SMEs

The Government announced a change to the R&D tax relief scheme earlier today, which will increase the amount of tax free cash that loss making companies can claim from HMRC under the SME scheme.

If a company spends (for example) £100,000 on R&D it can claim a tax deduction equivalent to 225% of the amount actually spent, and tax losses of up to £225,000 may be surrendered to HMRC for a tax free cash payment.  This part of the rules remain unchanged.  However, what has changed is the rate at which these tax losses can be converted into cash.

This rate is currently 11%, and therefore a company can currently claim up to £24,750 of tax free cash from HMRC (based on the £100,000 spend).  However, for expenditure incurred on or after 1 April 2014 this rate will increase to 14.5%, and therefore the tax free cash that could be claimed will increase to £32,625 – an increase of £7,875.

Paul Arnold – Bevan & Buckland Tax Partner

Paul is an R&D and Patent Box specialist.  In addition to advising many owner managed businesses he has also advised some of the largest companies in the UK, including FTSE 100 companies and large multinational groups.

If you require any more information please contact Paul on 01792 410100 or paul.arnold@bevanbuckland.co.uk and he will be able to assist you further.

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

Ignore Auto Enrolment at your peril

Bevan & Buckland Accountants logoNOT PLANNING AHEAD FOR AUTO ENROLMENT COULD COST YOU BOTH TIME AND MONEY

With the Government’s new auto enrolment pension legislation now starting to have an impact on smaller firms, its essential that employers do not underestimate what is involved, writes Bevan & Buckland’s Financial Planning Manager, Gareth Tregidon.

Auto enrolment is set to have a significant impact on businesses’ cashflow over the next 4 years.  Whilst the initial contribution rates for employers enshrined in the legislation don’t seem too harsh (at 1%), this is set to rise to 4% or higher by 2018.  And although proper cashflow planning will be the most important factor, employers cannot ignore the research, due diligence, registration and ongoing administration involved.

Please remember that choosing a pension provider is only part of the process.  Even where you have an existing scheme it is not necessarily the case that you can relax, as not all pensions are compliant with the legislation.  In all cases you will need to show that you have undertaken some form of due diligence in selecting which provider you will use.  In an increasingly litigious society, you never know what the Government, regulators or a disgruntled employee may do in the future, so it’s essential you have documented the process you have gone through.

The Pensions Regulator’s website (which can be found here) provides a lot of useful information, including details of the steps employers will need to take to comply with the legislation.  We have also produced a factsheet to provide further information on the main points, which you can download from our website here.

Bevan & Buckland are running free monthly seminars for employers to explain auto enrolment, and the steps you need to take to comply with the legislation.  If you would like further details, or to book a place, please visit the Events section of our website which can be found here.

Most importantly, don’t leave it too late!  The process of making sure you prepare for auto enrolment is very time consuming, and can take several months to complete.  Although The Pensions Regulator should write to all employers 12-18 months before they become affected by the legislation (known as the firm’s “Staging Date”), we have several examples of businesses where this hasn’t happened.  Unfortunately, not having received the letter is no defence against the significant fines that the legislation allows the regulator to charge for non-compliance.

As you would expect, Bevan & Buckland have a comprehensive range of services designed to help employers through the auto enrolment process, from basic advice & guidance to undertaking all of the work for you.  Our menu-based service allows you to choose which aspects you want to do yourself, and which you would like help on, meaning that you can do as much or as little as you want.  For further details please contact either us and we will be happy to talk you through what we can do to help.

Gareth Tregidon.

Gareth Tregidon is manager of Bevan & Buckland’s Financial Planning Department, which operates from the firm’s Swansea, Pembroke and Haverfordwest offices. The department provides fee-based advice to personal and business clients, both from within the firm and elsewhere.

Gareth is a Certified Financial PlannerCM and an accredited Later Life Adviser with the Society of Later Life Advisers (SOLLA).  He is former Chairman of the Institute of Financial Planning in South Wales, and an assessor for the internationally recognised Certified Financial PlannerCM licence. 

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

Strategic Report and Directors’ Report

Bevan & Buckland Accountants logoWho does it apply to?

The Companies Act 2006 has been changed, accounts for medium and large companies ending on or after 30 September 2013 with require a strategic report to be included within the directors’ report in your statutory financial statements.

What companies are required to prepare a strategic report?

The directors of a company must prepare a strategic report if:

  1. The company is either a medium or large company i.e. you exceed 2 of the following:
    •  turnover exceeds £6.5m
    • gross assets exceeds £3.25m
    • more than 50 employees
  2. The company is a parent company, and you prepare group accounts.
    • The strategic report must be a group strategic report relating to the undertakings included in the consolidation.
    • The group strategic report may give greater emphasis to the matters that are significant to the undertakings included in the consolidation, taken as a whole.

What happens if we do not prepare a strategic report?

If the directors do not prepare a strategic report, an offence is committed by every person who:

  1. Was a director of the company immediately before the end of the period for filing accounts and reports for the financial year in question, and
  2. Failed to take all reasonable steps for securing compliance with that requirement.

A person guilty of an offence under this section is liable:

  1. On conviction on indictment, to a fine;
  2. On summary conviction, to a fine not exceeding the statutory maximum.

What needs to be included within the strategic report?

The purpose of the strategic report is to inform members of the company and help them assess how the directors have performed their duty under section 172 (duty to promote the success of the company).

  1. Whilst there is no set format, structure or layout for the report, it must contain:
    • a fair review of the company’s business, and
    • a description of the principal risks and uncertainties facing the company
  2. The review required is a comprehensive analysis covering:
    • the development and performance of the company’s business during the financial year, and
    • the position of the company’s business at the end of that year, consistent with the size and complexity of the business.
  3. The review must, for an understanding of the development, performance or position of the company’s business, include:
    • analysis using financial key performance indicators, and
    • where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters. “key performance indicators” means factors by reference to which the development, performance or position of the company’s business can be measured effectively.
  4. If a company qualifies as medium-sized the review only needs to include financial key performance indicators.
  5. The strategic report may also contain any other matters required under section 416(4) to be disclosed in the directors’ report if the directors consider they are of strategic importance to the company.
  6. The report must, where appropriate, include references to, and explanations for amounts included in the company’s annual accounts.
  7. The report does not require information about impending developments or matters in the course of negotiation if the disclosure would, in the opinion of the directors, be seriously prejudicial to the interests of the company.

If you require any more information regarding this please contact either Alison Vickers or Harri Lloyd Davies on 01792 410100 who will be able to assist you further.

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

 

Local firms team up with the latest technology

Bevan & Buckland Accountants logoLeading South Wales accountancy firm Bevan & Buckland are pleased to announce that we have teamed up with Infinity Document Solutions (IDS) in Swansea for the supply of new multifunction devices across our offices.

bevan and buckland infinity multi function device  As a forward thinking practice Bevan & Buckland have always looked to maximise what we can do for our clients  by investing in the business, in particular our IT infrastructure.  The new machines that we have introduced have faster printing and scanning capabilities but with half the running & maintenance costs, something that will save the firm thousands of pounds a year.

As we continue to archive our older paper files to a digital format the increase in scanning speed has proved invaluable.  With new features like scanning and printing from iPads and other mobile devices staff can now access their files whilst in meetings, whether in one of our offices or out with our clients.

Bevan & Buckland’s IT Manager, Ian Thomas, commented “We get approached by photo copier suppliers on a regular basis.  However we have dealt with Bleddyn, Lee, Mike and Rob for over a decade, and have always had excellent service.  We have found them friendly and approachable, and whenever we have had either a query or any problems they have always responded quickly and efficiently.  As soon as they got their new venture, Infinity Document Solutions (IDS), up and running we were only ever going to deal with them”.

IDS Director Bleddyn Bowen commented “As a local organisation we are delighted to have been chosen as the preferred supplier to such a well-established firm as Bevan & Buckland.  We have known several of the individuals in the firm for many years, and who we at Infinity know not only as  business partners but also personal friends.

We aim to offer Bevan & Buckland outstanding personal customer care on a local basis, servicing both their Swansea and Pembroke offices. They can be assured that all their enquiries will be dealt with quickly and efficiently by someone in our local Swansea office, without having to go through call centres often located around the globe.

ecopy stationWe have installed at Bevan & Buckland the very best multifunctional devices that provide the highest quality print/output, incorporating the latest technology such as the ability to print/scan from mobile devices such as iPads, iPhones and android devices. Also, with the installation of eCopy enabling high speed scanning of hard copy documents that are stored and archived electronically together, these systems provide a seamless integration into Bevan & Buckland’s office infrastructure.

We at Infinity Document Solutions look forward to a long standing relationship with all at Bevan & Buckland and thank them for their support and trust in our company.

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484