‘Help Yourself’ by Mark McLaughlin CTA (Fellow) AAT (Fellow) TEP, is a consultant with The TACS Partnership LLP

Mark McLaughlin warns that if taxpayers don’t keep full and accurate records, HMRC could help themselves to additional tax that would not otherwise be due.

Owners of cash-based businesses (e.g. market traders, hairdressers, etc) are a regular target for an HMRC enquiry. Some might say that such businesses are a ‘soft’ target for HMRC, on the basis that it is easier for the proprietors to ‘pocket’ takings instead of declaring them.
A likely story…

It must be said that some taxpayers do little to help their cause if they retain insufficient documentary evidence to prove their tax position.
HMRC cites (in its Enquiry manual at EM2104) Kilburn v Bedford Ch D 1955, 36 TTC 262. In that case, HMRC assessed a hairdresser for additional profits, whereas the taxpayer contended that the increases in his wealth were derived from betting winnings. The High Court upheld HMRC’s assessment, commenting (Harman J): “He alleged that these were betting winnings. It was for him to prove that but he really made no serious attempt to do so…”

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