According to recent research commissioned by HM Revenue & Customs into small businesses’ experience of the tax system, only 45% of people have confidence that HMRC staff give the right answers to their questions. They aren’t there to help you.
Take the case of Louise Stones, which shows just why the self-employed should take advice from an independent tax adviser or accountant when starting a business and completing their tax returns.
Louise is a self-employed radio DJ who presents the breakfast show on a local commercial radio station. When she needed to complete her first Self-Asessment tax return she sought advice from the business support team at HM Revenue & Customs who deal with the newly self-employed. She was visited by two different HM Revenue & Customs officers on three occasions at the radio station and her home in 2003 and 2004, who advised her what expenditure she could claim. She followed this advice in completing her tax returns for 2002/03 and subsequent years. She also met with a third HM Revenue & Customs business adviser in 2005.
On 14 May 2008 HM Revenue & Customs opened an enquiry into her tax returns. At the subsequent Tax Tribunal Miss Stones asserted she had been misdirected by the HM Revenue & Customs officers, and that HM Revenue & Customs should not resile from their previous advice. The Tax Tribunal agreed with her to a certain extent and allowed the deductions in her 2006/07 return based on the HM Revenue & Customs officers’ advice, although it was technically incorrect. However, amendments made to her 2007/08 and 2008/09 returns by the HM Revenue & Customs investigating officer were allowed to stand.
Clearly if Miss Stones had been correctly advised from the start, she would not have been subjected to a stressful tax enquiry which lasted over two years and adversely affected her health.
Dealing with an ICAEW Chartered Accountant can take the stress and uncertainty out of your taxation affairs. That peace of mind is worth it.