Inspection from the Treasury? Uh-oh. That is something no company wants to hear or deal with, so let’s take a look at how you can avoid now, and forever more.
Inspections are something that instils fear into every company owner, and freelancers alike, especially when it comes to managing your relationship with the Treasury. However, they are always lingering around in the back of everyone’s mind, so let’s explain how to avoid them in the most effective way possible.
Before we begin, it’s important to know that there a whole set of measures we are going to look at to avoid the Treasury inspection. So buckle up as we explain everything you need to know.
Common reasons why you can receive a fine from the Treasury
Clearly a fine is not the same as an inspection, however you need to know about both to understand the processes behind the inspection. In fact, you can receive an inspection long before you even get wind of a fine, and the main point here is that both are linked and you want to avoid both of them.
To avoid an inspection of the Treasury, you should know the most common reasons why you can receive a fine from them. Here are the main reasons why …
- Not paying VAT on time, or not paying them at all.
- Not paying the tax debt that you received from completing the self-assessment.
- Not correctly submitting the required documentation and declarations for liquidation.
- Accepting returns, benefits and/or tax incentives that you are not applicable for.
- Requesting returns, benefits and/or tax incentives that are not applicable to you.
- Not properly communicating a change of fiscal address.
- Submitting your income statement after the deadline.
How to avoid an inspection
Now you know how to avoid those dreaded fines, we can focus on how you can completely avoid any inspections from the Treasury, let’s take a look;
- Make sure you have a good tax adviser. This figure will take control of tasks such as the creation of models and the presentation of taxes to avoid errors that can cause an inspection.
- Give the adviser all of the necessary information, and do so on time. An adviser is not responsible for issuing invoices or monitoring expenses, so it’s imperative that you provide all the information available so they can do their job correctly.
- Pay attention to providing cross information. Keep in mind that most models involve offering the same information in different fields. If the information provided has any discrepancies, it will most likely result in a tax inspection.
- Avoid discrepancies in your accounts. The treasury will consider it suspicious if there are any errors in what you report and what your account actually says.
Does the above apply if I am self employed?
Of course, the above information absolutely applies to anyone who is self employed. There are a few points that are more specific to those who work for themselves, and here’s a few ideas that will help you avoid a tax inspection
Firstly, it’s absolutely crucial that you avoid by all means making any errors when you deliver your quarterly VAT and personal income tax returns. Further, the same goes for any invoices you make, they must be absolutely correct as this may spark The Treasury to look further into your billing, the most common mistakes are;
- Error in the numbering of invoices.
- Error in the calculation of VAT.
- Not having broken down the VAT.
- Tax the wrong VAT rate.
Using the above tips, you should find yourself plane sailing away from any inspections from the Treasury. And to help and guide you further, you should consider a great online accounting program.