Dedicated to the taxpayers of Britain, and the employees of His Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Web security company M86 Security Labs, which is now part of TrustWave SpiderLabs, is
inadvertently helping fraudsters to carry out phishing attacks claiming to be
HM Revenue & Customs.
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.
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.
It seems that HMRC has gone on one of its little fishing trips again. This time it is trawling the waters inhabited by landlords.
Mike Down, of Baker Tilly, is quoted by the Association of Residential Letting Agents(ARLA) as describing the recent
campaign by HMRC to crackdown on rogue landlords as "shocking" and
"scarily aggressive".
Down claims to have seen a "stencilled" letter which had been sent to
one landlord client. Down made clear that this landlord had been
perfectly compliant when declaring his rental income. The information
used to contact the landlord had been supplied by a local council.
The
letter reportedly asked for a thorough breakdown of all the properties
owned by the landlord, including addresses, periods let, the amounts of
rent involved and the number of tenants at each property.
Down was quoted:
"Clearly
it's good to see HMRC cracking down on tax cheats, but we do have real
concerns over what appears to be the non-risk-based approach of this
campaign. What's even more shocking is that telephone staff at
HMRC are openly admitting that the probing letters are being issued
without the department having first checked whether the landlord is in
fact fully declaring the rents on their annual tax returns. Quite
aside from the fact that questions asked of taxpayers who have
completed returns under Self-Assessment must be made under the formal
and time-sensitive enquiry framework, it seems that HMRC staff are
unnecessarily wasting the time of law-abiding taxpayers, as well as
their own valuable people resource. Surely it's time HMRC were
more careful with their precious resources and invested time in
carefully checking third-party information before sending what might be
viewed as scarily aggressive letters to those who are fully tax
compliant?"
Have any loyal readers received such letters?
Please drop me a line if you have.
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.
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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
I see that HMRC seem to have gone on another of their little fishing trips, wrt using queries about possible errors on tax returns to find out financial information about the taxpayer and others (eg divorce settlements).
"We have received reports that HMRC is making informal enquiries which may amount to no more than thinly disguised fishing trips.
HMRC has staff working in Compliance Centres whose job is to make less formal enquiries, such as to query the amount of interest declared on a return where it does not agree with information in their possession. Robert Maas wrote about this in TAXline in May 2011.
Generally, we welcome this initiative as it can save a lot of time and expense in resolving simple enquiries. However, is HMRC over-stepping the mark and using this process as a convenient way to obtain information to which it would not normally be entitled?
One example quoted to us is that of an enquiry being made into the return of a divorced woman to find out more about her divorce settlement and therefore her ex-husband.
Have you had similar experiences?"
In the event that you have had similar experiences please feel free to share here, and also let the Tax Faculty know.
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 Taxwise.
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.
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
HMRC have gone on another one of their regular fishing trips.
This time they have written to 600 offshore account holders, asking them a number of questions about how their accounts operate and to inform on their advisers' involvement in tax avoidance.
The underlying rationale of the letter is to find out how offshore products are being sold, and if financial advisers are taking part in tax avoidance.
For the umpteenth time, tax avoidance is perfectly legal!
Answering the letter is of course not compulsory.
Lawyers are warning that if people answer the questions, and raise points that are of "interest" to HMRC, the answers given may one day be used by HMRC against the persons who responded.
Under no circumstances answer this letter, throw it in the bin.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Nick Morgan warns that HMRC are allegedly demanding personal financial records from business people, without proper grounds for suspicion. He also notes that section CH223430 (from the investigators' handbook) has been dropped.
Section CH223430 tells inspectors that they need to find something significantly wrong, questionable or suspicious in a business's record (ie they need to 'break' the record) before they can demand personal financial details from an owner or director of that business.
However, Morgan quotes Mark Morton, head of tax at Mercia Group:
"I am increasingly coming across requests for private bank details in opening letters. In early meetings the Revenue has focused purely on private affairs."
Anne Eager, enquiries manager at Robert James Partnership, is also quoted:
"I have had requests for private bank records from my clients in opening letters. When I challenged the request, the inspector said that it was to save time, as he felt it was very likely there would be issues with the records.
He added it was a 'standard approach' under the new regime."
In other words HMRC are indulging themselves in fishing trips into people's private bank records. Once HMRC have access to those records every payment into the account would be under suspicion, and it would be for the taxpayer to prove that the payments in do not constitute taxable income.
How would a taxpayer prove, for example, that money paid in for a friend's share of a social non business related dinner was not taxable income?
HMRC claim that Section CH223430 will return.
Why has it disappeared then?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
"Contracting States are not at liberty to engage in 'fishing expeditions' or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer."
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Nationwide and HMRC are having a few interesting exchanges over HMRC's request to Nationwide to disclose details of its customers with offshore accounts.
The Times quotes Nationwide:
"Nationwide has been in active discussion with HMRC on this matter.
However, we do not believe our records enable us to identify those customers who live in the UK and have an offshore account.
We have already informed HMRC of this, but inquiries are ongoing".
Doubtless the same discussions are ongoing with other building societies.
I wonder if the extra tax revenue earned will cover the admin costs incurred wrt this fishing trip by both HMRC and the building societies?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Aside from the civil liberties issues of granting HMRC (ie the state) more power to invade the privacy of individuals, for I suspect precious little reward, who exactly will end up footing the bill for HMRC's forthcoming trawl for information about offshore bank accounts?
Under Schedule 36 of the Finance Act (which came into Wednesday), HMRC now has the power to issue information notices to banks, forcing them to provide data on clients with UK addresses holding offshore investments.
Over 300 banks have been ordered to surrender information about customers with offshore accounts.
Brian Mairs, of the British Bankers' Association, said:
"No bank has any interest in shielding customers who would seek to evade their tax obligations. However, all of them have a duty under the law to keep their customers' affairs confidential.
The affected banks have yet to receive the notices, but once they receive them they will engage with HMRC to understand what information is being sought, whether it is in the power of the bank to provide it and, if so, in what time scale?"
James Bullock, tax partner at McGrigors, is quoted in The Times:
"For the financial institutions concerned this disclosure process is incredibly onerous and costly and they have to foot the bill themselves - even though they are doing HMRC's work for them."
Powers for invasion of privacy and spying should be in proportion to the results expected. I remain to be convinced that this fishing trip will net the government billions in evaded tax receipts.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
TAXWISE 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.
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Barrister Keith Gordon, of Atlas Chambers, has set up a blog covering his appeal against the right of HMRC to ask the "service company" question in tax returns.
This question was introduced in 2008, and has caused controversy over its legality and confusion as to what constitutes a "service company".
Needless to say, if the hapless taxpayer neglects to fill in the "service company" section of the tax return (where he technically should have done) even though his tax return gives rise to an accurate assessment of his tax liability, he will liable to a fine.
KERCHING!!!!
Barrister Gordon is of the view that a tax return should be designed so as to include only questions that are statutorily permitted, and directly relevant the calculation of an individual's tax liability for the year under review.
Quote:
"HMRC do not have the right to ask additional questions merely on the grounds that it is administratively convenient (for them) for such questions to be addressed."
He goes on to warn of the dangers of the new powers given to HMRC as from 1 April 2009. They permit HMRC to ask any taxpayer for any information "reasonably required by [HMRC] for the purpose of checking the taxpayer's tax position"
