The number of taxpayers seeking to challenge HMRC through judicial review jumped by nearly one-fifth last year.
The FT reports that HMRC faced a record 90 applications for judicial review as aggrieved individuals and businesses tried to overturn what they claimed were illegal or unreasonable decisions.
Adam Craggs, head of tax disputes at RPC, a City law firm, said the upturn was a sign of the growing pressure on HMRC to increase the tax yield:
“Until two or three years ago I could count on one hand the number of judicial reviews against the Revenue. In the past couple of years it has gone through the roof.
HMRC has a duty to act fairly and lawfully, but more and more taxpayers are finding that it is falling short of the mark.”
Mr Craggs said a number of cases were being brought by taxpayers who faced bankruptcy:
“A lot of the arrangements and transactions go back 10 years. The notices arrive on the doormat out of the blue and they don’t have the cash to pay it.”He said the increase in applications from 42 in 2014 underlined concerns raised in the tax profession about the controversial powers HMRC has gained in recent years. Some of the applications represented claims by several thousand individuals.
Some of the cases involve HMRC’s ability to issue accelerated payment notices (APNs), which allow it to demand upfront payment of disputed tax from people who took part in avoidance schemes. The taxpayer is required to pay the bill within 90 days, without any right of appeal.
HMRC said:
“Accelerated payments have changed the economics of tax avoidance by requiring those under investigation for tax avoidance to pay the disputed tax upfront, putting them in the same position as the majority of taxpayers who pay first and dispute later. HMRC has won all five judicial reviews decided by the courts on the accelerated payments regime.”The increased powers given to HMRC coupled with the increased pressure on it to bring in more money is a toxic combination.
Tax does have to be taxing.
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Indeed the pressure to collect more money combined with the excessive powers HMRC have, is a toxic combination. Fortunately in Britain the majority of people and businesses want to pay their fair share of tax, but they are not prepared to pay more on the say so of a morally bankrupt and essentially untrustworthy organisation - increasing challenges to their decisions is simply an inevitable consequence of how the 'modern' HMRC is not trusted by taxpayers.
ReplyDeleteAn issue to look out for is HMRC discrimination - too many bigots.
ReplyDeleteAn unashamedly violent organisation...
ReplyDeleteIn Vat there is a published business brief which states that where previous misdirection has taken place , no retrospective action will be taken -the internal guidance states the assessment should be issued and the taxpayer "invited" to appeal-this leads to either a judicial review which the department knows it will lose, or the taxpayer can write to the adjudicators office .The assessment is recorded in office figures even though it will never be collected, and taxpayers who are not savvy are bullied in to paying amounts not due ! My own parents received a tax demand out of time under the one year rule -my complaint to the adjudicators lead to withdrawl in 2 weeks .This is an organisation without ethics or scruples where cash is king and the law an irritating side issue.
ReplyDelete