Publicly the Inland Revenue recognise that only a small percentage of tax payers deliberately submit inaccurate returns and accounts. It is unfortunate then that some taxpayers are penalised during investigations, not for purposeful tax evasion, but for innocent failures in record and book-keeping. The penalties, which are settled in hard earned cash, cover lost tax, interest and a penalty loading and can almost always be ill-afforded. For this reason alone, we have always encouraged our clients to keep full and proper records.

It is disappointing then that a great many taxpayers choose not to demonstrate their honesty by keeping good records and in so doing, run the risk of severe demage that can be caused as a result of an investigation. It could be argued that since the Revenue only pulls out 3% of cases per year, the risks are minimal and so there is not much encouragement to keep complete records.