HMRC confirm that late accounts increase the risk of a tax enquiry

Following our entry about aspect and full tax enquiries, we have been asked for advice on how to minimise the risk of an enquiry. Whilst we cannot get inside the minds of a tax inspector (would you want to?), we do consider which items are likely to give rise to an enquiry when we prepare your accounts. This includes looking at unusual costs, considering margins and looking at the income you take for reasonableness. This work drastically reduces the risk of an enquiry and is one of the reasons why our fees may be higher than an unqualified or inexperienced accountant working on their own.

HMRC have confirmed that they do a risk score on accounts and that a variety of other factors come together to increase the likelihood of an enquiry. One such item is the late submission of accounts and tax returns and the later the submission the higher the risk.

We now have very good systems for sending out requests for records and whilst we can’t ensure immediate turnaround, if you respond to our requests quickly, the risk of an enquiry will be greatly reduced.

If you have received a request for records from us recently and are struggling to provide the information requested, please speak to whoever has written to you or to your client manager for help.

The importance of websites are ignored by SME’s

According to a report from web hosting firm 1&1 Internet, one in five small firms place little importance on setting up a website. The report also showed that 53% of consumers would shun any company without a web presence!

With it being possible to set up your own website within 30 minutes, there is little excuse in 2006 to ignoring over 50% of your potential customers.

If you would like us to recommend someone to assist you with web designing please email Cheryl@stephen-hill.co.uk

What is a qualified accountant?

We sometimes get new clients who did not realise that their old accountant was not qualified.

As the law currently stands, anyone (even those without any accounting qualifications or even training!) can call themselves an accountant and set up in business to complete accounts, tax returns and other associated consultative work.

Qualified accountants are required to undertake numerous exams and undertake extensive training supervision before being able to provide a service to the public. The two leading qualifications in practice are Chartered (designated by ACA or FCA after someone’s name) or Certified (designated by ACCA or FCA after someone’s name). The F rather than A indicates that someone has been qualified more than ten years.

Apart from exam passes, the governing bodies of both Institutes require their members to follow and ethical code and operate quality assurance policies. Unqualified accountants often lack experience, knowledge and resources. If you wouldn’t trust your families’ health with an unqualified doctor, would you trust your business and finances with an unqualified accountant?

“If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.”