I learned recently about an ex-client who is unfortunately now being investigated by HMRC for the return they prepared themselves.
Perhaps they had decided to prepare their own accounts and tax return this year with the belief that it would save them money, however trying to do things yourself rather than using a professional can be a false economy.
As well as the cost of their own time (that people usually forget to allow for) there is also the worry about whether the return and accounts have been prepared correctly – and whether they have claimed for all the expenses they are entitled to. Indeed, when we prepared their return last year we were able to secure a tax refund for them.
Should there be mistakes made, then there could be possible penalties charged by HMRC…
…as well as the cost of putting them right.
The costs of a HMRC investigation can be significant, indeed some advisers offer insurance policies to their clients specifically to cover these professional fees.
However, for our clients using the silver service package level and above we include HMRC investigations as part of the complete fixed fee package.
This is of course only available to our own clients in relation to accounts and tax returns that we prepare for them.