Matt Osbourne, Lead Partner for Armstrong Watson, Leeds, has been working with and advising North Brewing Co over the last 12 months. Matt explores the qualities that make North Brewing Co, and the individuals that drive it, such a standout success.
Accurately knowing your costings is an essential part of running a successful business, particularly if you’re looking to make significant changes and grow. However, sometimes the need to make changes in your business also requires the need to change the way those costings are worked out too.
We recently assisted a long standing Manufacturing client with exactly this issue. The method they were using for costing their production of parts for the engineering industry was old fashioned and no longer fit for purpose.
An independent analysis of HMRC enquiry data by the Institute for Fiscal Studies (IFS) has revealed nearly 60% of businesses, within the hospitality sector, owe extra tax after an investigation. That alarming success rate is one of the reasons why we encourage our hospitality clients to subscribe to our Tax Investigation Service.
This engineering company received an enquiry notice from HMRC asking to review the reported number of associated companies and its effect on the corporation tax computations. The initial review revealed that one of the three associated companies had been missed and further tax would be due.
There is nothing particularly unusual about these enquiries and therein lies the problem – even a straightforward enquiry is likely to cost the equivalent of 10 years subscription to our tax investigations service.
Pubs, bars and clubs, as well as cafes, have always been popular targets for HMRC to investigate. This
is primarily because these businesses are deemed to be cash based enterprises, with plenty of scope and opportunity for record keeping errors and tax mistakes. Subscribing to our Tax Investigation Service means when the seemingly inevitable happens, our professional fees to assist you will be covered.
In their dash for cash to maximise the tax take for HMRC, inspectors often argue disproportionately when they know they have a weak case. Or, they change tactics part way through an enquiry to exploit perceived weaknesses elsewhere. It is no wonder so many people subscribe to our Tax Investigations Service when they know inspectors drag out enquiries excessively in their desperation to generate extra tax.
HMRC began an investigation into a firm of architects by requesting a formal visit.
HMRC recently launched an enquiry into a farming business, asking for an analysis of the general farming activities, rent and rate expenses; and capital allowances computations for plant and machinery. Although HMRC are not looking at everything within the accounts, the initial cost estimate of £1,000 has already been exceeded and could easily double, subject to HMRC’s approach.
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