TAX TIPS AND ADVICE
HMRC has begun "benchmarking" selected trades of small and medium enterprises by writing to them if their net profit ratio does not fall in line within a specific range. HMRC take a business sector and calculate the ratio from tax returns over the past three years.
The range can be comparatively wide because businesses are not run in the same way and there are variables - however if the business does not fall within the "benchmarking range", HMRC are considering issuing a letter informing the tax payer and asking them to review their figures, contact HMRC and tell them what amendments are needed to revise the profit.
The letters are not a formal investigation but a warning that their accounts are being risk assessed.
For more information and advice please contact Mike Holdstock or Paul Train at Holdstock Nicholls Train & Co on 01482 504114.