One comment on “HMRC starts testing the use of profit ratio ‘benchmarks’ on trade sectors

  1. This reminds me of an alleged unpaid duty case of quite a few years back, where a senior inspector, noted for his hard nosed mien, decided a local restaurant had been grossly understating its income.

    I had the pleasure of attending a seminar, where the speaker was a top tax expert from De Loittes, previously, a senior inspector and as part of the absorbing seminar, took us through the case step by step.

    Turned out he had been instructed to fight the case: which he won, in spades…….

    The business, a family affair, had decided a business model of low price and maximum throughput and furthermore, were much less than greedy on their drinks prices. Which meant the place was always full.

    The client won the case and De Loittes recovered their full costs from HMIR as it was then.

    Thereafter that inspector was a very chastened man!

    Benchmarking is a nice idea: for statisticians; however, rarely translates to the real world.

    Sell Fee Protection insurance to all your clients, guys and get ready to fill your boots!

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