It’s the very last thing that most company managers want to see – a big, brown envelope with the return address of HMRC on the back. It can mean that you made a little mistake on your last return and it needs a quick review. You could have got your calculations wrong, it happens to the best of us. In fact, most of the time that’s the case – you’ve made a tiny little math error and your return has been sent back for correction.
Unfortunately however, there could very well be a time when that big, brown envelope means something very different. Nobody enjoys being audited – it’s time consuming, stressful and downright frustrating, however UKIMS can help make it easier.
Even if you’ve got absolutely nothing to hide, it can often feel like the HMRC have targeted you and your company for a reason. The truth is that HMRC often pick businesses at a random for auditing purposes and if you’re one of the unlucky ones – you’ve just got to stand up and be counted. Here are some handy tips and tricks that you can use to make sure that you’re prepared for an audit in the workplace.
Be careful not to unnecessarily frighten employees about an upcoming audit. Do adequately prepare them, though. They don’t have to memorise any figures or be able to recite six months worth of expenses, they just have to be able to demonstrate their worth within the company. It’s likely that only two or three employees will have any contact with audit staff at all, so doesn’t panic about this part of the process, say experts at the IRS.
Have Relevant Staff Available
If you employ specific people to take care of the financial end of your business, they must be available and on site during the audit visit, says financial expert Leslie Atkinson. This includes attorneys, record keepers, bursars and trustees. It may also include members of staff who are directly responsible for the hiring and firing at your company. You shouldn’t have to prepare these people for an audit – they should already know the drill and be completely aware of what’s expected of them. If they don’t, the quality of their training could be at issue. If anything, you should be turning to them for information on the financial side of your business.
When it comes to procedures as important as a government tax audit, it is vital that you don’t try to mislead authorities in any way. Large gaps in your records will look suspicious if you don’t explain them truthfully. There’s no guarantee that you won’t be penalised for having large gaps in your records in the first place, but it’s much better to be suspected of carelessness than fraud. If you don’t know the answer to a question, be honest and explain the reasons why you don’t have the necessary information. It is important that you behave professionally and responsibly when it comes to audit time, says BankRate.com.
It’s natural to be anxious about an audit, but if you haven’t got anything to hide, there’s no reason to be scared. Whilst it’s important to realise that audit staff are not your friends and not really on your side, they don’t have any personal grudge against you or your company. They’re simply carrying out orders. They must pay their taxes, just as you must pay yours. Try not to appear too anxious or stressed when talking to audit personnel. You should come across as professional, but in an open and friendly manner.
Photo Credit: Flickr/Alan Cleaver