It’s that time of year when many self-employed people and businesses are thinking of their taxes. For Her Majesty’s Revenue and Customs (HMRC) too, the tax being paid by these individuals and organisations is of course a paramount concern.
In recent years the HMRC have adopted a tactic of targeting specific groups of people and types of businesses for further investigations at certain times, in a bid to clampdown on tax evasion and secure extra revenue. In the beginning of 2015, horsebox owners are amongst those that are due to be specifically singled out for extra attention.
The risk of deceitfully declaring your horsebox as a business expense
According to chartered accountancy firm UHY Hacker Young, “HMRC is scrutinising taxpayers that it suspects are dishonestly claiming horseboxes worth hundreds of thousands of pounds as company expenses.” The firm says that it has carried out research which suggests that HMRC believes that some unscrupulous farmers and rural business owners are purchasing valuable horseboxes through their companies so as to save substantial amounts on their tax bill.
Some individuals may have a valid business use for their horsebox, for example if they use it for transporting race horses or stud animals. But if they also use it for their own personal activities which they then fail to declare, they could still be found to be evading tax. Others may on the other hand use it solely for leisure purposes, but see purchasing it through their company as a harmless way of saving money. But that’s not the way the HMRC sees it.
According to UHY Hacker Young, the organisation has the ability to, “monitor the lifestyle of suspected tax evaders,” using readily available tools like DVLA databases and Google Streetview.
Even those who have a valid business use for their horsebox could find themselves in hot water if they fail to keep and present the proper documentation that proves the vehicle is being used for these purposes. Without this, horsebox owners could find themselves at the sharp end of a lengthy investigation, fined a substantial amount, or worse.
When seen in this way, the short-term gains of purchasing a horsebox falsely through your company can seem insignificant alongside the potential penalties for being found out.
Don’t get caught out
If on the other hand you are using your horsebox on the side to make a profit, for example by hiring it out, you must be sure to declare your earnings made in this way, however small.
In addition to making sure that your tax affairs are in order regarding your horsebox, it’s also important to make sure that your horsebox insurance is valid and up to date. If you need any assistance in this regard, get in touch with Park Insurance.