21-05-2007
Firms urged to protect against tax inquiries
Businesses are being encouraged to make sure their company insurance policy provides protection against tax inspection inquiries.
HM Revenue & Customs (HMRC) confirmed earlier this year that tax inspectors are now being offered individual bonuses of up to £2,000 for tracking down unpaid tax and collecting more money from taxpayers.
This means that businesses are more at risk than ever from tax inspections and could leave themselves open to expensive inquiries if they do not take out the relevant optional add-on as part of their company insurance.
Tony Matthews, senior partner at chartered accountancy practice DRE & Co, told the Shropshire Star: "In the past, even though we have suspected that tax inspectors' pay was based on the yield from tax investigations, the threat of random investigations by HMRC should be reason enough to consider taking out insurance."
Mr Matthews conceded that it was unclear whether the bonuses will have any effect on the number of inquiries, but said that HMRC's reward scheme "raises many questions" and should prompt firms to consider reviewing their company insurance.
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