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13 Jul 2020

In the UK, it is more popular than ever to either run your own business or to be a sole trader. While running your own business has its own advantages, such as choosing your staff, clients and specialising in what you love, for many people new to the world of business, it can create a headache when it comes to taxes.

Reading the HMRC tax guide can feel akin to reading and memorising an old fashioned phone book, promoting anxiety for many new business owners. After all, getting taxation right is imperative to both the success and reputation of your business and nobody wants to get caught up in the legal system due to human error. So, how can you avoid getting caught out without reading every subsection of the tax system?

Simple. When starting your own business or sole trader position, ensure you hire legal representation, such as a fraud solicitor, to oversee your accounts. At ABV Solicitors, our trained team will be able to advise you on how to pay the correct tax rate, set up a PAYE system for your employees and will make sure your company pays the correct tax rates. Perfect!

But, just to be sure, let’s look at what scenarios can constitute tax fraud, or more seriously, tax evasion in the UK.

Underreported income

This is by far the most common cause of HMRC accusing a new business of fraud.

While this is more often than not due to human error, once flagged up by HMRC, it is wise to have a fraud solicitor to fight your case. Our team can help smooth out any mistakes in your accounts and will discuss your intent (a key aspect in many cases), with an HMRC representative. Not only does this save time, but it also significantly increases the chances of the charges being dropped.

Intentional underpaying

While a fraud solicitor would never assume that this is the cause for an HMRC tax evasion case, it is important that HMRC is fully aware that your company has not been intentionally underpaying. But, in instances where this has been the cause of an allegation, it is important to have a legal representative on your side, to attempt to fight your corner in relation to tax avoidance measures, which are legal under UK law.

Falsifying accounts

Like intentional underpaying, falsifying accounts is a serious crime.

Usually involving understating your company’s taxable income, falsifying documents and accounts can not only end your business but can land you with a huge fine or even jail time!

Best to avoid doing this altogether, and contact our team at ABV Solicitors immediately if you are concerned about unintentionally declaring a lower taxable income.

False business expenses

If you have a business that involves meeting lots of clients in restaurants or other establishments, you can claim associated expenses as tax-deductible. In instances where you have no kept receipts for such meetings, contact our team at ABV Solicitors for advice on providing an accurate declaration to HMRC.