These days businesses rely upon various other companies to help administer sales.
This might be card companies to facilitate payment or if you are in hospitality, companies such as Just Eat, Hungry Horse or Deliveroo to facilitate orders.
Any one of these might be approached by HMRC to provide them with details of your receipts so that HMRC are able to estimate your total sales.
The owner of a Chinese Takeaway in Hull was recently imprisoned. She declared takings during a 6 year period of £341,483.
However, by contacting Just Eat and Hungry House, HMRC determined that the actual turnover was £950,990 in the same period.
There was therefore significant underpaid VAT, Corporation Tax and Income Tax.
HMRC adopt similar tactics with debit and credit cards comparing what has gone through the cards to the turnover declared in your tax return or in your VAT returns. We have seen them do it in practice.
So, make sure all your sales are properly recorded and that all your data and returns are consistent so that HMRC cannot catch you out.
If you want to discuss any of these or any other points further, you know where to find us.
I am Alan Long from The Long Partnership.
Making life less taxing.