HMRC Issues Bitcoin VAT Exemption

HMRC has abandoned plans to charge VAT on Bitcoin trading.

In new guidance, HMRC also said it would not levy the 20% tax on the creation (mining) of the virtual currency.

Bitcoin has been in the headlines over the past few months as it surged upwards, then downwards, in bubbles of speculation. To add to its "media presence" MtGox, a leading Bitcoin exchange, recently collapsed losing $500M in deposits.

Despite the fact that Bitcoin can be used for all manner of illicit transactions, money laundering and evasion HMRC exempted it because (as per the BBC) transactions "are exempt because they fall within the definition of 'transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments'".

However, VAT will apply to suppliers of goods and services sold in exchange for Bitcoin, based on the sterling value of the virtual currency at the point of sale.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Pumping a Dry Well

The government has dismissed recommendations from the Public Accounts Committee over the reporting of HMRC's accounts and the tax gap.

Specifically the government has dismissed the recommendations that HMRC should "be more explicit" about the limitations of the current measure of the tax gap (£35M as per figures released in October 2013) and gather greater intelligence about the value of tax lost through avoidance.

However, both the government and PAC agreed that HMRC had overestimated the yields expected from UK holders of Swiss bank accounts, and that HMRC should pursue these more aggressively.

The government is quoted by Accountancy Age:

"The UK-Swiss agreement is raising revenue that would otherwise largely remain beyond the reach of UK authorities. The department continues to rigorously press the Swiss authorities to understand why receipts are lower than originally expected by either country. 

The department will also make full use of the enhanced exchange of information provisions under the agreement to identify ongoing evasion, and is contacting every person whose details were disclosed under the agreement to ensure that all tax, which should be paid, is paid." 

However, as I noted in July 2013, HMRC is pumping a dry well there:

"The trouble with the ongoing politicisation of tax (or rather the mechanisms involved in collecting tax) is that the politicians and media "professionals" involved in the spin are apt to "overspin" the issues and potential results etc.

Such appears to be the case with the "landmark" tax agreement between the UK and Switzerland, which Osborne heralded last year as:

"The largest tax evasion settlement in British history."

Fast forward to the present day and we see...cough... that it now looks set to raise much less revenue than expected, according to an update from the Swiss Bankers Association (SBA).

Osborne expected to raise £5BN over five years, of which £3.2BN of revenues expected this year have already been included in the government’s borrowing figures.

However, the SBA said in a report last week that it is possible that less than £900M would be directly transferred to the UK. The association said that first indications suggested there were fewer untaxed UK assets in Switzerland than had been previously assumed, largely because many clients have resident non-domiciled status."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Regina v Vagina

Kudos to loyal reader Angela Nangle (ex HMRC member of staff), who has recently published a book "Regina v Vagina" which outlines HMRC's attempts to imprison her for tax evasion.

As per a review on this site:

"Regina v Vagina is an entertaining (if idiosyncratically written) book, which will probably leave you with a sense of exasperation at the idiocy of public servants who, in pursuit of an ill thought out political policy, think it’s a good idea to waste £250,000 pounds on dragging anyone through the criminal courts for the sake of just £7,000 of income tax. Somebody really should sit down with Angela and turn her book into a film script."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Is Infallible

My thanks to Paul Reeves (a loyal reader) who has directed me to case notes published on his site, concerning a five year dispute that one of his clients had with HMRC regarding tax credit overpayments amounting to £5K which HMRC wanted to be repaid immediately.

A satisfactory resolution (stage payments of the overpayment and restitution by HMRC of professional charges) was only found after the case was submitted to the Adjudicator's Office. During the protracted dispute Paul notes that HMRC stuck to the mantra that HMRC does not make mistakes:

"The Tax Credits Office refused at any time, until forced to admit this when the matter went to the Adjudicator’s Office, that they had, or indeed could have, made an error."

He goes on to note:

"Query everything and do not take “no” for an answer. 

Persistence pays!" 

However, he warns:

"Please be advised that when you have received a decision from the Adjudicator’s Office in your favour, if  HMRC do not act in accordance with that decision, there is not much that you can do except make a nuisance of yourself until they finally implement the decision, just to get rid of you."

Has anyone else experienced similar problems with HMRC?

Tax does have to be taxing.  

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Patient Confidentiality Protected

Dr Kathleen Long (a locum GP working on Scotland’s west coast) has won an HMRC tribunal which ruled that HMRC could not access her business diary to investigate her tax affairs; ie patient confidentiality has been protected.

Dr Long, having self-reported an error in her 2010/11 tax returns for her private hypnotherapy business, was asked by HMRC to produce her business diary in support of her self-assessment tax return.

Dr Long argued that such a demand would infringe on her patients’ confidentiality rights. HMRC conducted an internal review of the case, and determined that Dr Long could not use patient confidentiality as a defence against handing over the diary. However, at the tribunal the judge found that the business diary was unnecessary in the investigation of her tax affairs.

As per Pulse Today, Judge J Gordon Reid found that:

"Dr Long has been cooperative in relation to HMRC’s enquiries.

The appeal is allowed. Dr Long does not have to produce her business appointments diaries to HMRC."

He cited a ruling from a European Court of Human Rights case from 1997 that found:

"Respecting the confidentiality of health data is a vital principle in the legal systems of all the Contracting Parties to the Convention. It is crucial not only to respect the sense of privacy of a patient but also to preserve his or her confidence in the medical profession and in the health services in general."

Baker Tilly tax partner Andrew Hubbard said:

"I suspect that even if it hadn’t been a doctor’s case the tribunal might have said that was a step too far, but the fact that it was a doctor and confidential information I think weighed the balance even more in favour the confidentiality [being protected].

While this ruling doesn’t say that under any circumstances a doctor’s diary is sacrosanct, I suppose you could say it is a win for reasonableness.

I suspect the message to doctors is that these paragraphs do exist and you don’t want to get into the position that she did. I suspect Dr Long is rubbing her wounds, but she took one to ensure her patients’ affairs remained confidential."

A spokesperson for the HMRC said:

"We are considering the judgement."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC - The Movie

My thanks to a loyal reader who advises me that Lin Homer has proudly announced that there will be a three part documentary on TV next year about HMRC.

This is interesting given that HMRC does not discuss individual tax cases, and that staff are bound by OSA and various civil service guidelines concerning confidentiality etc.

The fact that Excom have approved such a documentary leads me to suspect that Excom believe that they can "manage" the impression given and the final result.

We shall see!

Documentary makers (especially "reality" TV shows) are very skilled at making fools of those who appear in them eg; The Hotel Inspector, The Call Centre, Come Dine With Me, Permission Impossible etc.

I would be grateful to hear more details about the documentary, and which company etc is making it.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Putting Things Right - Where Is The Justice?

My thanks to a loyal reader who gave me permission to publish a letter that she sent to:

- Dan Rogerson

- David Cameron

- Nick Clegg

- Ed Miliband

- Margaret Hodge

- David Gauke

- Lin Homer (e-mail)

- The Adjudicator

- Parliamentary and Health Service Ombudsman

She won a tribunal against HMRC regarding child benefits and tax credits. However, she is still waiting for HMRC to "put things right" and 13 months after raising the matter with the Adjudicator is still waiting for a result; as the Adjudicator's Office is overwhelmed with casework.

To add insult to injury, having emailed Cameron two weeks ago about the situation, her email was answered by HMRC telling her to raise the matter with the Adjudicator.

Here is the text of her letter, with locations edited out in order to protect her identity.

"Just over 3 years ago my daughter and I fled the controlling clutches of her Police Sergeant father in **** to the edge of *******.

Together with HMRC, he had made life so difficult for us we had no choice other to leave our family home and start a new life hundreds of miles away where the only person I knew was my father.  3 years later and with my daughter now 6 years old life is very pleasant and the battles between her father and me have been resolved, but not without years of heartache, distress, solicitors and tribunals caused by my daughter’s father and the actions of HMRC.

I am writing this letter because, despite having unfinished business with HMRC in waiting for their apology, it has become clear that I am not the only person to have part of my life destroyed.  Because HMRC is attempting to cost cut and in doing so is destroying families and driving them to despair, with their decisions made wholly to save money.

The 250 mile move has led me to another mother suffering the same at the hands of her controlling police officer ex partner in ****.  HMRC’s award of Child Benefit and Tax credits to the high earning officer, over the part time minimum wage mother, is confirmation of my suspicions that this is a cost saving exercise for HMRC.  I battled HMRC for over 2 years to prove they were wrong in their decision, which they made on this basis.

A tribunal took 5 minutes to agree with me WHILST THE HRMC REPRESENTATIVE AGREED WITH THE JUDGE MUMBLING ‘I’M NOT SURE WHY WE’RE HERE!!!!!’  Hell and my life destroyed, leaving our friends and family, the village I grew up in, our home (previously MY grandparents), filling each day with letters and evidence gathering day after day for 2 years whilst struggling as a single mother, ink, paper, postage, photocopying, telephone calls mounting on my credit card bill, overdraft, interest, frustrated telephone calls to a call centre, being misinformed by HMRC staff, constantly being told that my call couldn’t be escalated to any senior person, hours trying to entertain my 3 year old daughter whilst dealing with paperwork and making phone calls, time and money lost in travelling to tribunals, my daughter’s first trick or treating missed, the list goes on………to hear those sorry words from HRMC ‘I’m not sure why we’re here’.  I want to scream as I write this remembering the torture and pain I was going through.

The 13 months which have passed since my complaint was initiated with the adjudicator has given me nothing other than telephone calls with the adjudicator telling me that they are so inundated with complaints they have no idea when mine can be investigated.  This needs to be resolved and is a matter of public concern.  The adjudicator cannot cope with the volume of complaints.

Nearly two 2 years later, and having won my tribunal against HMRC, they should have put things right as they advocate in their ‘Putting Things Right’ leaflet.  Seeing my whole situation playing out in the new town I have moved to, with another set of parents shows I am not a ‘one off’.  HMRC have learnt nothing and continue to make things wrong, far from putting things right.  Somebody needs to take control of this situation.

My e-mail to 10 Downing Street 2 weeks ago, highlighting the waiting time for the adjudicator, was UNBELIEVABLY responded to by HMRC telling me that I needed to direct my enquiry to the adjudicator.  What an ABSOLUTE joke and a course of action which I am utterly disgusted with.  Mr Cameron you have let me down and there are many more people suffering too whist this is being ignored.

Can somebody please help us?"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Complain To Your MP

The ICAEW Tax Faculty has urged people not to be afraid to complain to HMRC about problems, and goes on to advise that people should also raise issues concerning HMRC with their MP as well.

I fully concur, and have been advising loyal readers who write to me with their problems to raise them with their MPs; as it is the politicians who are ultimately responsible for the complexity of this country's tax system and the disaster that is HMRC.

Specifically the Faculty states that it has had reports from its volunteers and members that incorrect liabilities on HMRC employer PAYE accounts are an increasingly common problem, and many of these cannot be solved by software suppliers.

Some of these have arisen because:

• RTI returns or other notifications or payments to HMRC have not been processed correctly, or indeed at all 

• Employee records have been duplicated 

•  Amounts have been reallocated without reference to employer or agent.

There are also difficulties interpreting what is shown on HMRC’s Business Tax Dashboard (alias Liabilities and Payments Viewer – available only to employers, not their agents). Hours have been wasted on the phone to HMRC trying to sort things out or even negotiate with bailiffs collecting apparent PAYE debts that are not due.

The Faculty states that if you recognise any of this, you will be aware that this takes time, and time is money. Interestingly, and ironically in the light of events, the impact assessment published alongside Budget 2012, which has not been updated, estimated that RTI was supposed to save employers more than £300M per year.

"ICAEW and other representatives of employers, pension payers, payroll agents, bureaux and software developers and HMRC are working hard to try to resolve PAYE RTI difficulties by way of a joint task force. HMRC is publicising updates on its What’s New webpage.

Given the current problems surrounding RTI, it seems timely to remind employers and their agents at the coal-face about how to complain to HMRC and seek financial redress.

Please see the Tax Faculty’s TAXTools 4 - Making complaints to HMRC for more details and help on how to make a complaint.

When reclaiming additional professional fees, the employer/client should supply HMRC with a receipted fee note. To help clients’ cash flow, we suggest that agents bill separately for such additional costs and the client pays by cheque, which is then banked by the agent once the employer/client receives reimbursement from HMRC.

For PAYE RTI problems, write to HMRC at the following address:

Customer Operations Employer Office
BP4102 
Chillingham House 
Benton Park View 
Newcastle Upon Tyne 
NE98 1ZZ

Complaining to HMRC does not stop you writing also to your MP, should you wish. Your MP can draw the fact that all is not well with RTI to the attention of the relevant Minister.

As a general point, agents can register with an HMRC Agent Account Manager (AAM) to pass through comments and get a helping hand. For details of what AAMs can do and how to register see HMRC’s guidance Agent Account Managers (AAMs) in HM Revenue & Customs. 

However, while AAMs will work with agents to resolve client-specific problems, the Agents' Issue Resolution Service does not replace HMRC’s process for formal complaints, which agents should use first." 

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"