Landlords are being advised to purchase legal cover in their landlord insurance policies as a Government department prepares to investigate thousands of small businesses.
In the face of a mounting financial crisis the Government has instructed Her Majesty’s Revenue and Customs office (HMRC) to scrutinise more closely the workings of small businesses across the UK. It is thought the HMRC have recruited 90 new inspectors to root out cases of tax avoidance and their remit will be to go out and check the records of over 20,000 small enterprises each year.
A spokesman for the Association of Small businesses said: “HMRC is planning to investigate many more landlords and small businesses this year, and is expanding its investigations on several fronts. The first is its controversial Business Records Check regime. The scheme was trial led in selected areas last year, and the Revenue is now preparing to roll it out across the country.”
One of the trials focused specifically on landlords and property owners in the North East last year and the success of that initiative will probably lead to the net being dragged wider. The HMRC will look at record keeping in particular and landlords should be aware that their tax returns must correlate with their business records. If not they will be fined if the experience of those landlords in the North East is anything to go by. If a landlord does find himself in a battle with the tax man then adequate legal insurance is a must if he finds himself in a courtroom fight. It is quite easy to add different elements to ones property insurance policies and any good insurance company will provide a help line as a first line of defence.