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FSB protects Northern Ireland business through HMRC inquiry

We are always keen to hear from local members about the barriers and obstacles they face in running their business, and one recurrent concern amongst small business owners is the cost, disruption and stress brought about by an inspection from HMRC. Kevin Duffin, of KMD Accountancy Ltd in Portstewart, told us recently about his client’s experience of dealing with a HMRC inquiry, and how FSB stepped in to help.

“We would like to share with you details of an actual tax investigation case which, in our opinion, validates the benefit of the Tax Investigation Protection provided by FSB. Our client, who has been an FSB member for several years, is self-employed as a photographer and has been trading for over 5 years. 

At the end of January 2017 our client received a letter from HMRC regarding his self-assessment tax return for the year ended 5 April 2015. HMRC informed our client that they would be checking his return under the provisions of Section 9A of the Taxes Management Act 1970. HMRC had obviously commenced an inquiry. Our client’s business had been making losses year on year from 2008/09 onwards. 

Our client contacted FSB, on receipt of this letter, and received an email from the one of FSB’s Senior Tax Consultants on 24 February to confirm that he would represent our client during this inquiry. 

The inquiry firstly concentrated on the level of business expenditure claimed in the year 2014/15 and then HMRC challenged the commerciality of the business. HMRC were of the view that the business was not trading on a commercial basis with a view to making a profit. They clearly don’t recognise how tight the margins are for many local businesses in the current climate. 

Following consultation between HMRC and FSB’s Tax Consultant, the inspector concluded the inquiry on 6 July 2017 and issued a formal Closure Notice. Effectively the enquiry was closed with no adjustments to our client’s 2014/15 tax return. 

Whilst our client suffered an anxious six months while this inquiry continued, he was reassured by the support from FSB and extremely relieved when it concluded without any additional costs to his business.

We, together with our client, wish to express our gratitude to FSB and to their Senior Tax Consultant for their expertise in dealing with this stressful situation.”

For more information about how FSB Tax Investigation Protection could help your business, visit our website or contact us on 028 9032 6035.