Impact of legitimate errors in tax return. Tax accountant recommended?

[Makmaning3]

Geetings.

I do not wish to use a tax accountant as I have only a low value single letting business requiring me to lodge my income and a single total figure for my allowances. I am rather confident knowing what the correct allowances are having read up on this.

But in reality how likely or often will the tax man likely to check my records? and so how long should I keep my records for? I have seen conflicting information detailing 2 and 6 years.

If I did make a legitimate error calculating allowances (I am sure this is not uncommon in greyer areas?) do I simply pay back the tax plus interest for 2 or 6 years or will I actually receive large fines.

If the risks are great I intend to use an accountant.

Subjective opinions welcomed

[lord_cheeseman]

They'll only investigate one year but if they find any problems they go back for full 6 years. I say 6 years but if they deem there to be a major fraud they'll go back to your birth. If they do find you owe money they'll ask for the money plus 8% interest. If they do find any problems you can expect to be investigated every year after that. I found the inland revenue to be incredibly helpful when I was investigated, even just for basic advice......and it's free. If you believe you have made an error give them a call and ask them to clarify. Then you can be correct going forward.

I'm not sure about the fines, I only know two people that have made botched claims. They just had to pay the monies plus the interest. Those errors were in the order of 1000's

[Makmaning3]

Thanks for the response.

I guess paying back the money would not be problem as it was owed in the first place.

The 8% interest is not great, but cheaper than hiring an accountant as I suspect that if did make any errors they could only be relatively small and no more that in the hundreds of pounds a year simply by the small size of the letting business, income and allowances in the first instance.

Checking my accounts there wouldn't be a problem as any potential error would have been resolved inthe audit year.

On balance I don't think I need an accountant.

I will await any other responses with interest

[Telometer]

You're just as likely to be making errors paying too much tax as too little.

[TaxationPete]

Read further:
http://www.landlordzone.co.uk/forums/showthread.php?t=22651
Regards Peter