Wedding Woes
I was approached by the father of a young lady who ran a bridal wear shop. She had unfortunately been under investigation for two years! She was at her wits end and was clinically depressed. The Tax Inspector had decided to recalculate the business takings and concluded that profits should have been £60,000 instead of £20,000. The tax consequences of such an adjustment to profits (for several years) would have resulted in bankruptcy and the inevitable closure of the shop.
I travelled 120 miles to see the clients and reviewed the investigation correspondence. I very quickly noticed that the Inspector had made a fundamental error in interpreting some information given at a previous interview. The Inspector concluded that items for resale (dresses etc) were marked up by 250% instead of 150%. I visited the Inspector and after some discussion (frank and open and robust) it was accepted that there had been a “misunderstanding”. The case was closed and the client is happily still trading.