Local Accountant saves company thousands in tax

If you are serious about being in business, you will know that the tax man is not usually regarded as your best friend – and having a good accountant is worth its value in gold.

Press Release (PressBurner) Mar 09, 2010 - When Inland Revenue raised an investigation against a Kent businessman, a local Kew based accountant, Haleem Ossman, CEO of Ossman Associates, demonstrated this when he stepped in to the rescue – and sent the taxman running.

Inland Revenue argued the scaffolding purchased by the business should be partially disallowed as it was acquired from a company that had subsequently gone into liquidation, the invoices did not appear to be genuine and many were paid by cash.

“The scaffolding was in excess of 2 million pounds,” explained Mr Ossman, the former Treasurer of the Richmond Chamber of Commerce, “it was treated as an asset in the accounts as it was hired to clients.”

The amount written off as an allowance on the tax computations were in excess of a million pounds. This gave rise to a potential tax liability of over £300,000 plus interest and penalties.

Mr Ossman insisted it was unnecessary for the client to attend the meeting with the Inspectors - who had over 25 questions that required responses.

“In one question, the Inspector could not understand why a scaffolding business needed a ‘tax allowable’ black cab,” continued Mr Ossman.

The cab was used to avoid congestion charges, whilst allowing travel in bus lanes to save on time.

“I thought this was quite creative,” added Mr Ossman.

Then the major question about the disallowance of the scaffolding costs arose.

“To the astonishment of the Inspectors,” said Mr Ossman, “I suggested they disallow the entire scaffolding purchases as it appeared that almost 100% had been acquired for cash from the same supplier.

“I then suggested that, on their agreement of the above, the company income should be written down to nil, and any Corporation, Vat and Payroll taxes refunded as the client could not have run his business without having access to the scaffolding.”

The 2 Inspectors began muttering they needed to look at the case in more detail, then packed up their cases and left…and subsequently closed the investigation.

A situation that could have been prolonged and exasperating for the client proved to be quite simple to resolve, just by adopting a slightly different strategy which satisfied the tax inspectors, reaching an amicable agreement with HMRC not to raise any assessments.

Added to that, the client, who had not done anything wrong, was saved a lengthy, stressful investigation.
www.ossmanassociates.com; Tel: 020 8332 7666

Special Offer!

Haleem is offering new clients a grand 30% discount off paper Tax Returns for October 31st deadline for the first year only. (Thereafter, they would be charged the full rate).

# # #

Bookmark:

URL here:

Link here: