Challenge business economics exercise letter

There can be many reasons to challenge figures produced by HMRC following it carrying out a business economics exercise. The figures will be based on broad industry-wide assumptions some of which might not be relevant to your business.    

Are your records deficient?

HMRC’s business economics exercises attempt to compare figures in your accounts with those generally applicable to the type of trade you run. While this approach is valid as an indicator that something might be awry it cannot be used to justify displacing your figures with those produced by the business economics exercise. HMRC can only do that if it can demonstrate:

• there are deficiencies in your business records
• the results shown by your accounts are not credible
• your drawings from the business are inadequate to cover your outgoings taking account of any other income you have.

So use our Challenge Business Economics Exercise Letter if you want to negotiate this way.