Missing Income?

A Scottish Doctor found himself under investigation for over 2 years.The Inspector claimed to have reason to believe that income had been omitted from the accounts. His determination to find the alleged missing income resulted in over a dozen different letters requesting information and two meetings at which the taxpayer, the accountant and the Inspector were present.

The second meeting in particular was very harrowing for the taxpayer as the Inspector had not yet discovered any "missing income" and became far more aggressive in approach. The accountant felt fully justified in sending a letter of complaint to the Inspector afterwards for "trying to make the taxpayer feel like a criminal".

The ensuing apology from the Inspector did not soften his determination. A detailed review of all operations and associated payments was carried out together with explanations being sought for every single deposit made into both business and personal accounts.

The investigation had reached an impasse when an independent investigations specialist became involved at the accountant's request (and the insurer's expense). A settlement was soon reached with adjustments only made for private use of motor vehicles.

The insurance policy paid over £5,000 to enable the doctor to prepare an adequate defence against an over aggressive Inspector.