A new scheme is been trialled over a six month period by HM Revenue & Customs. The single compliance process was rolled out on the 1st June 2011, with Reading being one of the 10 towns to be taking part across the United Kingdom. Instead of facing just one visit from HMRC, Small to Medium Enterprises will face inspections from three tax officials.
The tax inspection will cover Corporation Tax, Pay As You Earn and Value Added Tax, all in the same visit. Tax advisers are warning businesses that they may find the inspections disruptive and an intrusion into their administration. Although most businesses are familiar with a VAT inspection, which is a simple procedure, all three tax inspections in one day is likely to cause confusion for business owners.
HMRC is hoping that the single compliance process will help to detect tax evaders, enabling them to deal with the companies in a cost effective, efficient manner. Small businesses may find the prospect of having all three tax inspectors visiting the same day daunting, having to face a comprehensive interview and provide detailed answers. One tax adviser said:
“The business is typically visited by three inspectors, rather than just one, who will want to examine all tax affairs. Business owners can expect to face in-depth and sometimes difficult questions.”
HMRC usually gives one month’s notice, which allows for the tax adviser of a company to prepare all administration ready for inspection. Your tax adviser will also approach HMRC in advance, so that all required documentation is available.
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