Expense Audits

When HMRC come to call they will be looking closely at what goes on behind the scenes. They will NOT limit themselves to checking a few receipts. The first thing HMRC will do with any expense reimbursement is to decide whether the expense is allowable – no amount of documentary evidence will have any effect on an expense which is not allowable. For example – does the claim fail because there is one workplace throughout – S339(5)(a)(ii) ITEPA 2003? If there is one workplace throughout the employment what action has been taken to ensure that S339(5)(a)(ii) ITEPA 2003 does not apply? Has due consideration been paid to the effect, or non-effect, on a journey where there has been a change of workplace – S339(7) ITEPA 2003?  On a change of workplace has care been taken to check back over the previous 24 months to see whether there has been a continuous period – S339(5)(a)(i) ITEPA 2003?

Say HMRC check 100 of your cases in one year and find errors in 17 of those cases resulting in tax lost of £500 in each case. Say you have 1000 contractors. HMRC are likely to suggest that settlement should be made on the basis of 17 x £500 x 10 = £85000 + previous years + interest + a penalty. Before you know where you are over 5 years you are looking at a total exceeding £half a million.

You need to get it right.

Audit fee – fees are negotiable but as a rough guide -and on the assumption that I can travel in the day, that I spend 5 hours intensive on site and to include preliminary work and a full report following the event – £1000 + travelling.

If a training need is identified follow the link above - I also provide a priority email/telephone helpline for a fixed monthly fee – follow the link above – on the drop down menu.