HMRC Backtracks On SME Spot Checks

In January I wrote:

"The New Year is upon us, and already HMRC has been flayed by certain MPs and the Federation of Small Business (FSB) for harassing small businesses.

The cause of the outpouring of ire are the plans drawn up by HMRC for conducting spot checks on the paperwork, going back several years, of up to 20,000 firms as from April.

Ironically, as per an article I wrote in September, the original target was 50,000:

" HMRC have reduced their target for checking business records down from 50,000 to 20,000.

However, for reasons best known to HMRC, they are describing this reduced target as an "extension" of the scheme.

For good measure they also claim that the record checks are in the businesses best interests .."..."

I also noted that HMRC "appear to be backtracking on the plans."

Well blinkey blonkey blimey, here we are in February and lo and behold HMRC have indeed backtracked on the plans.

Following the public drubbing of the scheme, HMRC will now postpone making new appointments to check firms’ records until early in the 2012/13 financial year. In the meantime, HMRC will attempt to implement the recommendations of the review into this tainted and ill thought through scheme.

Let's see how that goes then!

Tax does have to be taxing.

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EU Refers UK To ECJ

Taxation reports that the European Commission will refer the UK to the European Court of Justice for abolishing the law concerning the remedy for repayment of taxes paid in mistake, without proper transitional rules.

EU legislation states that taxes that must be reimbursed, when they have been levied in breach of EU rules, should be repaid according to the national regulations on internal tax reimbursements.

The UK retroactively abolished one of the remedies used by taxpayers seeking reimbursement of taxes paid in breach of EU law. However, no proper transitional rules were provided, except in certain limited circumstances.

The result being that it became almost impossible in certain cases to exercise the rights conferred by EU law.

Naughty naughty!


Tax does have to be taxing.


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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.

To find out more, please use this link Taxwise

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.

Click the link to read about: Tax Investigation for Dummies

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Tax Avoidance Hypocrisy - Deepak Singh

Oh gosh how surprising, you know how I said earlier this morning in relation to the Ed Lester tax avoidance debacle, that others using tax avoidance schemes would be outed in the coming days?

Well here's one I told you about (relating to an HMRC employee no less!) in July 2010:

"Congratulations to HMRC's ex Chief Information Officer, Deepak Singh, who according to ifaonline was paid £149,500 by HMRC to work three months (June 2009 - September 2009) after his leaving date.

Singh's 3 year (£160K per annum) contract ended in June last year.

However, HMRC persuaded him to stay on for another 3 months in the guise of his consulting company Orwell Consulting.

In the private sector, when headcounts are being reduced, a well known "fiddle" is to sack someone then rehire them as a consultant (thus avoiding them appearing in the headcount figures).

Needless to say, I am sure that this was not the intention or the case here.

One rather nice little benefit for Singh of this arrangement, is that he is only liable for corporation tax of up to 28% (editor update: I have subsequently been advised that the rate was in fact 21%) on his earnings for these 3 months, compared with the higher-rate of income tax of 40%.

I have no problem with tax avoidance. However, HMRC claims that it disapproves of it (when dealing with non HMRC staff)."

My oh my, this is proving to be a right old clusterfuck of hypocrisy isn't it?

More outings soon!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
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What is TAXWISE?

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.

To find out more, please use this link Taxwise



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.

Click the link to read about: Tax Investigation for Dummies

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"

Tax Avoidance Hypocrisy - The Ed Lester Debacle

As we all know, the government is skint. Therefore over the last year or so the government and its bureaucratic arm, HMRC, have been doing their best to promote the idea that tax avoidance (which, unlike tax evasion, is perfectly legal) is somehow akin to tax evasion and morally wrong, and have attempted to whip the media up into a moralistic crusade against avoidance.

In January this year Cameron said the following:

"I think we need a tougher approach and one of the things we’re going to be looking at this year is whether there’s going to be a more general anti-avoidance power that HMRC can use, particularly on very wealthy individuals."


This of course is rather hypocritical, given that many MPs sit on boards of companies that operate tax avoidance schemes.

Anyhoo, imagine my amusement last night when coming home from the pub and settling down to watch Newsnight only to discover that the government and HMRC have happily signed off on a tax avoidance scheme.

Ed Lester, the CEO of the Student Loans Company, is happily receiving his £182K per annum without deductions for tax or National Insurance.

How?

He is using a tax avoidance scheme, whereby his pay is is transferred gross to his private service company, which has been signed off by HMRC!

This is the same HMRC that has been bleating that tax avoidance is somehow morally wrong!

In classic damage limitation mode, feigning surprise and shock, Danny "Beaker" Alexander has ordered an inquiry. Rather pointless given that the state signed off on this deal, ie the state knows about it.

Beaker claims that he was "not made aware" of the potential tax benefits to Mr Lester when he approved his appointment and salary levels.

Bollocks!

Mr Lester's deal was signed off by Universities Minister David Willetts and was passed to the Chief Secretary to the Treasury Danny Beaker Alexander for approval because his salary was above the prime minister's pay.

By the way, those in government and HMRC who are claiming that this is a one off had better take a stress pill or two, there will be others outed in the coming days who also have a similar arrangement.

Hypocrisy from the state and its bureaucratic arm (HMRC), who would have thought it?

Therefore, despite the bleating by HMRC and the anti avoidance campaign pushed by the state and HMRC, have no qualms about using tax avoidance schemes; the fact that the government and HMRC signed this one off shows that they perfectly happy that people use them, they just don't have the guts to admit it.

UPDATE

In the fallout from this clusterfuck of hypocrisy, the government has just announced that Ed Lester will now have his tax deducted from his income at source!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
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Quote ID code "ABC" when contacting a QROPS specialist.

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What is TAXWISE?

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.

To find out more, please use this link Taxwise



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.

Click the link to read about: Tax Investigation for Dummies

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 Clarifies Year End Extension II - Tax Credits

HMRC have issued a further clarification about the year end extension to 2nd February.

This clarification relates to tax credits.

The ICAEW reports the following from HMRC:

"...‘We can confirm that the same principle will apply as for Self-Assessment customers, that is tax credits customers who renewed their claims in 2011, but have only given estimated incomes, will also not be disadvantaged if they call with their actual income on 1 or 2 February.'

Claimants who renewed their tax credits at the first deadline, 31 July 2011, but who did so using an estimate of their 2010/11 income, had until 31 January 2012 to supply details of their actual income. For example, a claimant might have used an estimate of income if they were self-employed and did not yet have final 2010/11 accounts in time for 31 July 2011. 

The 31 January deadline is also an important one for those people who have not yet renewed their tax credits for 2011/12 – it may still be possible to make the renewal."

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

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What is TAXWISE?

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.

To find out more, please use this link Taxwise



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.

Click the link to read about: Tax Investigation for Dummies

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"

Reasonable Excuse - I Was Deducted By Aliens

As the 2nd of February extended deadline approaches, HMRC have tweeted that 445,000 returns were filed online yesterday, there will be those who will miss this deadline.

Some of those who miss it will have a reasonable excuse, whilst others will not.

Therefore I was amused to read in The Telegraph some of the more "unusual" excuses proffered by those who have missed past deadlines:

- the dog swallowed the envelope
- I had it in my back pocket and the wife put my trousers in the wash
- I was just about  to send in the return when I was abducted by aliens.

As "imaginative" as the above may be, I don't think they stand up to rigorous analysis wrt "reasonableness".

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

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.

To find out more, please use this link Taxwise



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.

Click the link to read about: Tax Investigation for Dummies

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"