The "Grey" Area - Avoidance vs Evasion

 

The Yorkshire Post reports that HMRC has individuals under criminal investigation for offences classified as relating to disguised remuneration and the loan charge.

A spokesman for HMRC made the comments in response to a joint report from the All-Party Parliamentary Group for Anti-Corruption & Responsible Tax and TaxWatch which recommended that HMRC changes its approach to enforcement by using existing criminal law to prosecute the advisers behind the most aggressive tax avoidance schemes.

The report argues that much that is claimed to be "legal" tax avoidance is actually criminal tax fraud.

An HMRC spokesperson said: 

“HMRC is committed to tackling tax avoidance schemes targeted at individuals and the amount lost through them has fallen by two thirds since 2013/14.

We continue to make it harder for promoters to sell tax avoidance schemes and to reduce demand, stepping up our efforts to warn individuals about the risks of being drawn in to avoidance, and helping them to get out of a scheme once they realise that they might be caught up in one.”

HMRC has not clarified how many "promoters" have been prosecuted.

Tax does have to be taxing.

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HMRC Targets Dodgy Granny Annexe Claims

 

The Telegraph reports that HMRC has clawed back millions of pounds from buyers making “granny annexe” tax relief claims. The amount recovered has increased by almost 400% in the last three years, according to a Freedom of Information request by accountancy firm RSM.

Chris Etherington, of RSM, said: 

“They are going to war on granny annexes.”

The loophole – officially known as “multiple dwelling relief” – allows buyers to pay less stamp duty if they are purchasing properties that are linked. This can include a portfolio of buy-to-let properties, or a house with an additional self-contained dwelling, such as a granny annexe.

The presence of an additional dwelling can save thousands in stamp duty. A buyer claiming multiple dwelling relief divides the total sale price by the total number of dwellings and pays stamp duty on the average cost.

The system has become open to abuse. In one case, a buyer purchasing a seven-bedroom house claimed that an en-suite bedroom qualified as a separate dwelling because it had a built-in wardrobe with an electric socket.

This claim was thrown out by HMRC and the buyer was ordered to pay extra tax.

In the tax year ending April 2022, HMRC investigated 222 claims for multiple dwellings relief and recovered £5.8m in falsely claimed stamp duty relief.

This was a surge of 383% compared to the £1.2m recovered in the tax year ending April 2019, the last full year before the pandemic, when HMRC made 124 dwelling relief investigations.

HMRC has warned of a surge in buyers and homeowners being targeted by tax reclaim agents and lodging incorrect claims.

An HMRC spokesman said: 

“We want to help those eligible claim MDR while ensuring the right tax is paid. Our analysis indicates that up to a third of MDR claims are incorrect.”

Tax does have to be taxing.

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• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

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Does HMRC Have The Capacity To Handle MTD?

 

Making Tax Digital for Income Tax with @HMRCgovuk

Between 4 to 5 million people will submit quarterly returns from April 2024

1st one due by 7th August 2024

I look forward to working with a system that can take between 1 to 5 million returns submitted on 7th August

— CheapAccounting.co.uk & TaxBootCamp.co.uk (@cheapaccounting) October 18, 2022

Elaine Clark makes a very good point.

Does HMRC have the capacity?

Views and comments always welcome.

Tax does have to be taxing.

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Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountant's (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your accountant (your tax return agent) to:

• Deal with any correspondence from HMRC
• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

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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"

Hunt Nixes Repeal of IR35 Reforms

 

Back to the future!

It's going to be very busy for those in the accounting and tax industry!

Tax does have to be taxing.

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Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountant's (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your accountant (your tax return agent) to:

• Deal with any correspondence from HMRC
• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

The Dangers of Deeds of Assignment

 

The number of people complaining to HMRC about companies claiming tax repayments on their behalf has more than tripled in two years, a Money Box investigation has discovered.

Many say this is happening without their knowledge or permission.

HMRC admits there are significant concerns about repayment agents and is "considering its next steps".

The complaints are about what are called "deeds of assignment".

There have been 1,808 complaints so far this year, compared with 545 in the whole of 2020.

A deed of assignment is when a person signs over their right to something, usually money related, to someone else to claim on their behalf.

When used properly, by legitimate tax repayment companies, they can help people get money they probably wouldn't otherwise manage to claim for.

The market is unregulated and open to abuse.

John Strawbridge is retired and two months ago he received three letters from HMRC.

The letters explained the £974 of marriage allowance John had claimed for would be paid, as requested, to a tax repayment company.

The problem was John had never heard of the company involved, had never claimed the money and, two months on, has still not seen a penny of it.

He is quoted by the BBC:

"It was a great shock.

I'm always very careful to fill in all my income tax and any other form and keep copies so... I spoke to my wife and said 'what on earth's going on, we haven't done anything about this. We'd better find out what's going on.'"

The danger comes from adverts on social media which ask people if they would like to check if they are eligible for refunds etc. Within these forms is a box which people are invited to tick allowing the company to claim on your behalf.

Tax does have to be taxing.

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Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountant's (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your accountant (your tax return agent) to:

• Deal with any correspondence from HMRC
• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"