HMRC are carrying out systematic tax enquiries into the owners of horseboxes, according to a report in today’s Accountancy Age by Calum Fuller.
Apparently there is evidence of a spate of enquiry letters from HM Revenue & Customs being sent to owners of horseboxes. HMRC suspect that people are claiming the purchase and running costs of horseboxes as a business expense: without making the appropriate tax adjustments for private use or declaring benefits in kind. Of course, businesses will often sponsor show-jumping and horse racing, and in particular horseboxes, in order to market their businesses. However, the tax inspectors often suspect that the motive for the expenditure is more related to private hobbies and interests rather than being part of strictly commercial arrangements.
Top end horseboxes can costing up to £500,000. Some businesses sponsor several vehicles. Aside from the high running costs, significant capital allowances are often generated when horseboxes are sold; which can happen every few years.
Top 50 firm UHY Hacker Young believes HMRC suspects some farmers and rural business owners of buying horseboxes through their company, either falsely claiming the cost as a business expense for tax purposes, or failing to declare personal use of the horsebox and paying tax on it as a “benefit in kind”.
What does this mean for me?
Where errors are found in the tax reporting, HMRC will frequently allege that this is a result of failure to take sufficient care. In those instances, HMRC can collect tax going back six years, and charge interest and penalties. If HMRC believed that the errors are deliberate then they can go back 20 years and charge higher penalties still. The amounts involved can be significant. If you receive an HMRC enquiry into a horsebox issue you may want to take specialist advice.
How Can Lynam Tax Enquiry Experts Help?
The Lynam Tax Enquiry Specialists have over 67 years of full time experience of dealing with HMRC tax investigations. We have satisfactorily resolved a number of enquiries specifically involving horseboxes in recent years. Typically, we have found that HMRC have not understood the business sufficiently and we have been able to negotiate highly favourable terms.
*Call today for a free and discreet initial consultation:
Paul Lynam: 0845 643 9997
Andrew Nutbrown: 07718 778710