THE INLAND Revenue is set to assume sweeping powers to force lawyers to comply with the self-assessment tax regime which kicked in on 6 April.
For the first time, partners and other individuals will be liable to random audits by the Revenue which, hitherto, has had to have good reasons for mounting investigations.
Industry sources suggest that the Revenue may carry out up to 250,000 random audits by the year 2000.
“Like anyone else, the legal profession is going to face a much tougher tax enforcement system as self-assessment is introduced,” said David Jewkes, partner at accountancy firm Moores Rowland.
Stiffer penalties are in store for those sending back their tax returns later than the first closing date, 31 January 1998. And there is a legal requirement for partners to keep tax records of everything from dividend income to business invoices.
Jewkes said: “Anyone could find themselves on the receiving end of a random audit.”