Client Challenge
Our client, a limited company, had an ongoing dispute with HMRC in connection with multiple aspects of its corporation tax returns. The enquiry had been ongoing for a significant amount of time and relationships between their current accountants and HMRC had become strained. There was a considerable amount of expenditure which HMRC considered to be either personal in nature, PAYE items and expenses which were not wholly and exclusively for the benefit for the trade. HMRC’s queries had crossed over into questions about the director’s personal tax affairs. The accountants requested support and the company director wanted a swift but successful resolution to the enquiry.
How did Bedrock help?
- Bedrock took control of the enquiry and re-established healthy relationships with HMRC.
- We undertook detailed reviews of credit card expenditure and overseas costs, activities and operations.
- We had several discussions with the client during which we obtained a full understanding of their business.
- We obtained supporting evidence for the treatment of items in the tax returns.
- We corresponded with HMRC on behalf of the client and had telephone conversations with the Inspector of Taxes concerned.
- We presented technical arguments to HMRC in support of the treatment adopted in the tax returns with supporting documentary evidence.
- We immediately conceded on items which were clearly personal in nature with full disclosure.
Business Impact and Benefits
We were able to present successful arguments to HMRC in support of many of the contested items in the tax returns of the limited company. Where items had to be adjusted our policy of prompt and full disclosure resulted in minimal penalties. We satisfied HMRC at an early stage that no further enquiries into the director’s personal tax returns were necessary.
Financial benefits
It is difficult to quantify the full financial benefit of our assistance with the enquiry as many items were recurring expenses. The directors the company were delighted that we secured deductions for overseas trips which involved training, accommodation and flights and for hotel costs relating to a non-resident individual. Our involvement meant that the directors gained a better understanding on what expenses are and are not allowable for the future and the items that should be included on a PAYE Settlement Agreement.
Contact Bedrock today for tax support bespoke for your business.
