There’s a pretty standard set of questions that the inspector will ask at the interview. These are mostly designed to undermine the records you’ve kept and so allow them to make a demand for tax on missing income/profits or over-claimed expenses. So how can you prepare for such an interview?
What will be asked
If you attend an interview, the inspector should start by explaining that they will ask questions and take notes on your answers. It’s best to answer all questions truthfully but not to elaborate. If the inspector wants the detail they can ask.
During your HMRC interview the following topics will be asked of you:
- The business
- Record keeping
- Your accountant’s work
- Drawings and private expenditure
- Other monies received
To prepare for your HMRC interview download our guide on these topics here >>> HMRC Interview Guide.doc (33 downloads)
Should you sign the notes
If you attend an enquiry interview, the tax inspector will make their own notes of what they “think” was said and use them against you if they can. They will probably try to get you to sign them as a true record of what came up at the meeting. Should you?
Read the notes
Never sign notes at a meeting. Gain yourself some thinking time by saying you would like to go over the notes in some detail. Ask the inspector to send them to you. Go through the notes looking for all the things that are wrong, both where they do not reflect what was said and where they do but you have since discovered that what was said was incorrect. The latter is one way of changing your mind after the event, particularly if an off-the-cuff remark is not confirmed by what you find in your records. Even when you send the amended notes back to HMRC, don’t sign but do include our Changing Interview Notes covering letter.
You can decline the interview
There is no statutory obligation to attend an interview with HMRC. If HMRC requests a meeting, but you’re satisfied that there’s no advantage to having one at this stage of the enquiry, you can write, declining a meeting and explaining why.
Once they have been through your records, the tax inspector dealing with your enquiry likes to sit down with you and go through a pre-prepared list of questions. They will have already anticipated your answers to some of these and will have more probing follow-up questions to match. The risk at interview is that you might give too much away or just give the wrong answer, all in an attempt to be helpful and get rid of the problem. Therefore, if you don’t want to attend an interview, send a Letter Turning Down an Interview to the tax inspector dealing with your enquiry.
You can download an example Letter Turning Down an interview here >>> letter turning down an interview.doc (39 downloads)
For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.