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September 6, 2013
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Tax Returns – The Importance of Disclosure

It's the time of year when many taxpayers begin looking at their self-assessment tax returns ahead of the 31 January deadline.

For those individuals who own businesses, sell assets or have interests in foreign climes, the completion of a tax return may not always be straightforward:

  • If tax planning has been painstakingly carried out, then all the effort and fee costs of implementing it, may go to waste if the situation is not disclosed properly on the tax return.
  • If the tax treatment of a matter is not absolutely clear, ie there is a “grey area”, then care must be taken.

If the facts support two possible treatments, then it figures that one is likely to be more favourable to HM Revenue and Customs and one more favourable to the taxpayer.

Unless the tax return is filed on the more favourable basis the taxpayer certainly cannot achieve the lower amount of tax.

However, if you file on the more favourable basis it is very, very important to tell HMRC about the facts, back up the interpretation adopted and clearly state if the treatment differs from HM Revenue and Custom's published practice.  If not, the taxpayer puts themselves at a much higher risk of penalties and the deadline for HMRC to open an enquiry may be longer than the normal 12 month enquiry window if a discovery assessment is made.

Our approach is to provide very clear options about the risks and rewards of the differing basis of filing to our clients.  An independent approach is very important.

We can then provide the content of the return for client to review on the most appropriate basis.

It is important not to under estimate the importance of considered disclosure when filing a tax return.

In terms of fees, our approach is to review the relevant tax return information and provide a tailored fee quote so that clients are fully aware of the fee basis before committing to any work.

Call us for a free consultation about your 2012/13 tax return on Leeds 0113 8878432

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