March 30, 2009
HMRC To Investigate Self Employed Homes
From next month, HM Revenue & Customs will be able to come into the homes of the self employed, without permission, as part of their new powers.
This extension will affect thousands of business people and sole traders who claim expenses for 'use of home as an office'; this is the "most significant changes to HMRC’s powers since the enactment of the Taxes Management Act in 1970".
Sue Holmes, head of national tax investigations at Smith & Williamson, the accountancy and financial services group, says: “The many thousands of business people and sole traders who claim expenses for 'use of home as an office' should recognise that from next month, HMRC has the right to enter their home to inspect business records. This power includes visits to any business premises, including any part of a residential home used as an office."
Moreover, it says if an inspection is approved by an authorised officer HMRC is not required to give any advance notice. An authorised officer would include a senior local tax inspector.
This, although alarming for many self employed people working from their home, will just remind those who do not earn a regular wage that their taxes and their finances must be in order. If the taxman does come knocking, you have to be ready because irregular taxes could spell huge fines or even prison.
A financial adviser is the best person to help with your files. They can help you get everything in order, can help you find the best deals and help you seek out loop holes that could save you a fortune. And the best thing of is that you decide when you speak to the adviser, you decide what you do and you can do it all over the phone, online or in person.
SOURCE: HMRC, 26/03/09
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