.png)
.png)
Accountants, law firms and other professional service providers should expect an 'onslaught' of HMRC enquiries into personal expenses, financial adviser Grant Thornton has warned.
The company said there could also be 'intense' scrutiny of the calculation of work in progress and accrued income, bad debt and dilapidation provisions, partner recruitment costs and a host of other payments.
The alert comes with fewer than three months until HMRC's deadline to launch investigations into most 2005-06 partnership returns.
The Revenue are expected to target accountancy and legal firms, architects, consulting engineers, surveyors, and other professional services.
Of particular interest to HMRC, claimed Grant Thornton, is income reported in the financial statements following the new UITF40 accounting standard, including a particular focus on contingent fees.
Partners' personal expenses (and the record keeping of the expenses), recruitment costs incurred on partner hire, provisions and bad debts will are being focused on, with queries being raised about the effort being made to collect the debts.
Grant Thornton director Lenka Hennessey said: 'The nature of queries has been far more intense than previously seen in the professional services sector. The level of detail that firms must respond with is far more sophisticated and lengthy than in the past'.
She added: 'We now expect to see the number of firms being investigated increase significantly over the next few weeks due to the timescale that HMRC have to open enquiries. So, it is essential that financial directors anticipate and prepare for this onslaught'.
