HMRC recently made an enquiry into a Capital Allowances claim prepared by Veritas on behalf of an investor who had developed a standard, unremarkable building.
The claim was fully transparent, HMRC viewed all supporting documentation, enquired into the basis of claiming certain items, and then agreed the full value of the claim.
During a meeting with the HMRC Tax Inspector it became apparent that an increasing number of claims being submitted are not fully compliant with the legislation, and in some cases, are double what they should be, particularly in certain industry sectors.
Consequently, HMRC have had internal discussions about focusing reviews into specific Capital Allowances claims to tackle this potential tax leakage. Add in to the mix the recently introduced 100% full expensing allowances and we can expect a substantial increase into the number of HMRC enquiries being raised going forward.
Errors are compounded by poor data, complex rules and lack of knowledge of the detailed legislation; ensure that the advice you receive not only maximises the available tax savings but is also robust enough to withstand HMRC scrutiny.