The importance of getting the question right
A couple of weeks ago, I had a bit of a moan on the blog about HMRC giving incorrect or incomplete advice about VAT issues. Since then, I’ve been thinking a lot about the problems of asking for and receiving advice about tax or business issues and why it is that people either don’t get the advice they need, or don’t understand the information that they’re given. And it has brought me to the conclusion that the most important thing is that the person asking the question actually UNDERSTANDS the question.
It’s the old adage that a bit of knowledge is a bad thing and that there is nothing more dangerous than someone who thinks they know what they are talking about. A friend of mine who works in a bar has been thinking about investing in the business and he was asking me to tell him where he could look for information about share valuation. He couldn’t understand why the share value of the company he was thinking about investing in is lower than the amount of capital that the existing owners invested in the company. Even with my limited knowledge of such things I realised that he was getting two separate issues muddled up and told him that if he is at all serious about investing any money in a business, then he needs to consult an accountant and/or a solicitor to get proper advice.
And the importance of understanding the question…
But it got me thinking about how often people must contfact HMRC asking for VAT advice without asking the right question. And even more so how often the HMRC employees don’t understand the subject enough to give the correct information. There was a question on the forum recently from someone who thought that they’d been given the wrong advice by HMRC. It sounded to me as though he had asked the wrong question and as a result, the officer had not understood the facts or the technical issues correctly so he’d received incorrect advice. And you can’t blame HMRC for bad advice if you haven’t asked the right question or, more importantly, understood the question.
I believe that both business owners and HMRC employees do their best to get things right, so this isn’t about blaming anyone. But I do think that if you choose to go into business, then you have to take ultimate responsiblity for at least getting the question right. I’m always amazed that people are loath to pay for legal or accounting advice before investing thousands of pounds in a new business, but always do their research and get advice before purchasing a new home or a new car.
If in doubt, ask for advice in writing
If you really can’t afford to pay for advice and there is a risk that you’re not asking the right questions, at least put the questions in writing so that you get a written reply and have something to fall back on if things go belly-up.
Other than that, I’m glad that it’s now the start of a new month as January was a pain in the proverbial. My laptop decided to go into critical care mode and pretty well out of action for the best part of a fortnight. As a result I’m about 2 weeks behind on work and wasn’t able to do my January newsletter and various other things. Thankfully I think I’ve sorted out the main problem and (touch wood!) will catch up with the website stuff this month. But it was a good reminder of how much we rely on our IT nowadays for business and our personal lives, thankfully I back up regularly and didn’t loose any work or other important stuff.
Have a good week!
Marie