The term Her Majesty’s Revenue and Customs (HMRC) refers to the tax authority of the U.K. government. The agency collects revenues, enforcing tax and customs laws, and enforcing the payment of minimum wage by employers. HMRC has wide-ranging powers from tracing bank accounts to maintaining order in the territory. HMRC maintains a record of earnings made by an individual through the details provided by the individual while lodging their tax returns. An outsourced accountant can help you meet the requirements of HMRC without any hassle.
HMRC launched a super computer or “snooper computer” to monitor individuals and companies. This software called “connect” has a rapid mechanism to analyze enormous amounts of information. HMRC has developed this software to disclose hidden earnings made by individuals.
The system notices the lifestyle and luxuries enjoyed by individuals and if it does not match with their income, it proves that they evade tax deliberately and knowingly. If caught, the guilty individuals are fined hugely. It is always better that individuals do not act smart with the higher authorities, because they are much smarter and more intelligent than these firms think of.
With the help of international cooperation, HMRC can catch hold of tax culprits. A global crackdown on tax evasion has helped HMRC to catch hold of the tax culprits.
If a bank or authority has any suspicion that a customer might be involved in money laundering or tax evading, they are obliged to alert the concerned authority. The authority further collects evidence and takes actions based on their research.
Hence HMRC has many tricks and techniques to catch hold of those who evade taxes and revenues.
What happens when an individual discloses his undeclared income to HMRC?
As soon as one goes and speaks the truth to the authorities, they assign an inspector who will further investigate into the case and handle other enquiries put onto the individual. The investigator further researches on tax returns filed before and demands for other additional documents and statements to study the case into greater depth. HMRC may schedule meetings with the individual and his associates to gather all the details.
Also, one’s behaviour with the officials will determine the level of penalty one may receive. HMRC after following all formal procedures, will calculate the penalty due and will submit its orders to the guilty party. HMRC will also provide them with a letter containing all the required financial details, including when they should receive the due figure.
Individuals are also required signing a letter accepting that they have disclosed all their gains and income. If the individual does not agree with HMRC at any point, it is best to take the case to the Tax Tribunals for further work on the case.
Hence the best way to save one from all the troubles is to file tax returns in the correct format duly. There is no point in showing less income than what is earned. It is always better to take help from a professional tax agent and a bookkeeper to maintain all the database and records. If firms cannot find suitable bookkeepers within their network, then the best strategy is to look out for people who outsource this service.
Many small business bookkeeping in Australia are already outsourcing bookkeeping and tax returns to the third party provider due to its several advantages.
What is the role of a virtual bookkeeper, tax agent?
A virtual bookkeeper would study all the transactions, investments and trade made by the firm in the year and would maintain records including vital payments, general and miscellaneous expenses made by the firms. Firms can study the record and compare it with transactions made in the previous year. Accordingly, they can plan strategies and schemes for further expansion and growth of the industry.
The work of a virtual tax agent is quite similar to a normal tax agent. He studies the work, mode of transactions and relationships with other firms and files returns accordingly.
It is always better to follow the correct path of earning, spending and representing the income. It may look fancy not to disclose the accurate figures to the authorities, but in the long run this decision may turn out terrible for you. Thus filing returns duly with correct figures and records is not just a responsibility but a duty for each firm for the overall betterment of the economy. To simplify your task and never miss filing taxes, you can choose outsource bookkeeping in Australia.
