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Cash in hand
KEY POINTS
- Identifying the correct level of business profits when takings are in cash.
- HMRC carries out mark-up exercises when a trader’s records are unreliable.
- Advisers should undertake their own analysis and not just accept HMRC’s figures.
- Impress on clients the importance of maintaining accurate records and separating business and personal expenditure.
Cash businesses are open to HMRC scrutiny which in the absence of adequate records could result in higher tax and compliance costs. In November 2017 the Treasury published Tackling Tax Avoidance Evasion and Non-compliance the focus of which was to set out more than 100 measures implemented to reduce lost revenue.
Most of these are aimed at targeting avoidance schemes and have little relevance to the trader receiving cash. HMRC must rely on tried-and-tested methods to identify...
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