How to handle tax risk: an in-house perspective

Businesses embrace calculated risks for heightened rewards. If a company incurs R&D spend there is no guarantee of its success but a great product opportunity may result. Some risks may be worth taking others not. It is no different in the tax world. If a company claims a business expense on its tax return the tax authorities may disallow it and assess tax on higher profits. On the other hand if the company decides not to deduct that business expense in the first place another risk presents itself: namely the opportunity cost of not claiming a business expense which could have been allowed. Opportunity – in this instance the claiming of a tax...