The investigations specialist representing a self-employed Kent tradesman who was penalised for overclaiming a £2,000 rebate under HMRC's new penalty regime has explained the background details to AccountingWEB.co.uk.
"McGrigors also took up the matter with a senior official in HMRC's penalty project team who was 'very understanding' and said he would take the case up as a complaint. 'If the client is not satisfied with the result, the appeal process is still open to us,' Berwick added."
Tax does have to be taxing.
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Can I just say that the story is very mislleading in it's wording. It actually transpires that the 'Innocent' gentleman in question filled in his self assessment tax return stating that he had suffered £3000 worth of CIS deductions but neglected to fill in any actual income figures and was therefore refunded the full amount. I'm quite taken aback at his belief that he need not include income figures certainly the return makes no mention of omitting these figures. When HMRC came to review the return the omission was noticed and corrected, it appears that the gentleman took the money and never queried it. As the police would say ignorance is no excuse, I side with HMRC in this instance.
ReplyDeleteI'm glad to see most of the tax professionals posting on the AccountingWeb page had a similar opinion to the one I expressed yesterday. Now the details have come out he completely failed to declare any income but remembered to declare the tax paid.
ReplyDelete"Ok I've read the story and as far as I can see he completed a Self Assessment return understating his tax due or over stating his tax paid by £2000. It was determined by HMRC compliance staff that this was deliberate, not careless, and he was fined £1400. Those are the facts of the case without any opinion one way or the other. The rest is just one sided opinion without any facts.
If he and the accountants quoted think they have a case why not just appeal instead of going to the press? If they are going to use the press why not give all of the details of the case? Could it be that it was clearly an attempt at tax evasion and no appeal, to any court, had a chance of success? Example - Every year Mr Smith forgets to declare the £100,000 he earns from job 1. In November he is reminded this needs to be included in his next Return that he submits in December. He "forgets" again and claims a refund he knows he is not due. He is then told to amend the Return by the compliance staff dealing with the enquiry into his Returns. He is then fined a penalty based on 35%-70% of the undeclared amount because it was deliberate and he had to be prompted to correct it."
Since he is unlikely to make that mistake again is this an example of the penalty system actually working?
If he did not fill the form in correctly why did they pay out to him anyway?.
ReplyDeleteBecause they have created a crap system that makes such dumb moves.
Because it's SELF assessment....duh.
ReplyDeleteAs mentioned above it's SELF assessment. Seriously though if I filled in my tax return and knew that I'd earned say 21475 and paid 3000 if all of that was refunded I'd look straight into it. Mr T wouldn't be his friend cause Mr T pities the fool.
ReplyDeleteOh its SELF ASSESSMENT!!!...like I said it's a crap system.
ReplyDeleteHow about this Morons--you keep you police/welfare(for the police and the wasters/crims)state and we'll keep our money.
The only acceptable level of taxation is none whatsoever.
@ 01:03 Mr T might like you, although I know he pities the fool I'm not sure what he thinks about ass-hats.
ReplyDelete@1.03
ReplyDeleteKnob. Not an ass hat. An ass hole.