The following guidelines should help you to avoid a tax investigation:
- Complete file accounts, returns and statutory forms on time.
- Avoid using estimated or provisional figures.
- Make use of disclosure boxes to explain major changes in any year which may have resulted in 'blips' (e.g. large amounts of interest received as a result of major inheritance or significant leap in turnover due to 'one-off' major order, etc.).
- Keep good and up to date records for the requisite amount of time (just under six years for a business and just under two years for an employee or non-business taxpayer).
- Avoid using company funds to pay personal expenses.
- Never pay round sum expense allowances.
- Try to avoid paying or being paid in cash.
- Undergo periodic 'health checks' to ensure systems are regularly updated and keep pace with growth in turnover.
- Never backdate paperwork.
- Never take actions retrospectively.
- Never push income into a subsequent quarter, month or year by delaying raising an invoice etc.