'Taxman tips' offered by experts

Date: 28th September 2009

Small businesses have been advised over how best to deal with tax investigations from HM Revenue & Customs (HMRC) inspectors.

Accountant Daniel Dover and financial writer Tim Hindle advise business owners to be very careful not to mislead the taxation authority, the Sunday Telegraph reported.

The experts also recommended that, although a visit from the taxman "provokes a number of violent emotions", business people should not "expect the worst" and should "keep calm".

Another key piece of advice offered in the report was that gaining expert advice, such as through an independent financial adviser or accountant, can be very beneficial in the case of a taxation investigation.

The report also stated that business owners should always make a full disclosure when questioned on a particular issue.

It added: "Do not suffer from selective amnesia when disclosing information involuntarily - this is particularly distasteful to HMRC and is likely to lead to a more punitive settlement since the HMRC will take into account your lack of co-operation when determining the penalty you have to pay as part of your settlement."

Mr Dover, who works at BDO Stoy Hayward, and Mr Hindle have recently written a guide book on the subject, entitled The Taxman Always Rings Twice.