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According to the Mail on Sunday, the Revenue makes up to 80,000 enquiries into the self-assessment returns, many promoted by something unusual, for example a claim for a phone bill which does not take account of personal calls; undeclared interest from a savings account or valuation of assets. Self-employed and small businesses are often among the targets with the building trade at the top of the list.
The Mail on Sunday claimed that the taxman raked in £255.5m last year in extra tax, interest and penalties after completing more than 42,000 'aspect' inquiries, which focus on a single anomaly on a tax return, and 36,000 full enquiries. The Revenue will not say how many random inquiries it makes.
The enquiry can start with a Section9A letter which the Revenue can send out within 12 months of the final filing date. A number of these letters has gone out recently as the Revenue rushed to meet its own deadline for starting enquiries into 2002/3 returns.
Full article: Return of the taxman - Mail on Sunday
Insurance
Taxpayers can take out insurance to cover the cost of an enquiry. Shout99 works with freelancer specialists, Qdos Consulting, who provides tax investigation insurance in the event of a Revenue dispute. Freelancers Outside IR35 costs £104.50 for a year's cover and includes representation by Qdos; a detailed manual on how to arrange your business affairs to minimise exposure; a help line; draft contracts and insurance against penalties.
For more information, see Freelancers Outside IR35
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Susie Hughes © Shout99.com 2005
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