Mark Morton

Inland Revenue pay-as-you-earn auditors sometimes raise issues that can be sorted out without incurring further tax and National Insurance, explains MARK MORTON.

I RECENTLY BECAME involved with a company which had received its initial pay-as-you-earn audit visit. The letter sent out after this visit identified certain areas of risk. To be fair to the Inland Revenue official concerned, he remained friendly and approachable throughout the process, but his approach left me wondering how many other businesses around the country suffer in similar fashion.

MARK MORTON warns readers of the questionable tactics being used by the Revenue in close company full enquiries.

THE FOLLOWING IS the text of a letter issued by the Inland Revenue on 25 October 2001. In my experience, this letter is representative of the approach taken by the Inland Revenue in many corporate enquiry cases. What concerns the writer is that the majority of the requests in this letter are not appropriate.

MARK MORTON illustrates an anomalous aspect of taper relief in a company winding-up and queries whether a concessionary practice exists.

SINCE TAPER RELIEF was implemented in April 1998, one common problem area has specifically centred on the liquidation of companies. The following example demonstrates the difficulty that arises.

Example

Benson Hotels Ltd has gone into liquidation following a trade and asset sale on the retirement of Benson, the company's controlling shareholder and managing director.