The Fear

Christopher Lunn, the accountant who runs CLAC (Christopher Lunn and Company), which has been in a protracted dispute with HMRC, has been featured in the Telegraph.

The paper says that Mr Lunn claims that HMRC has attempted to frighten his clients into paying tax that they do not owe, and that the investigation has been "a catalogue of blunders".

His clients have received letters informing them that any tax rebates due have been frozen because of the investigation, and others urging them to make a full disclosure of any irregularities that they are aware of in previous tax returns.

One letter, dated July of this year, addressed clients who had not contacted HMRC "with the intention of making a full disclosure".

The letter added:

"I have noted that to date you have not contacted me with the intention of making a full disclosure. I will now be checking your tax returns and if I identify any irregularities then I will deal with these matters either by criminal or civil procedures open to HMRC depending on the nature of these irregularities. 

"Please note that until we have checked your Tax Returns, HMRC will not be making any repayment of monies shown as being overpaid."

HMRC have confirmed that Mr Lunn's clients are not being paid any money at present.

"We have endeavoured, throughout our dealings with CLAC's clients, to give them every opportunity to come forward and discuss their affairs with us.

We wrote to all clients on 29 July, 2011, explaining that repayments would not be made until all returns had been checked. All repayment claims are currently being reviewed and individual claimants will be contacted shortly."

No charges have been brought against Mr Lunn, and there is no suggestion that his clients deliberately mislead HMRC.

Clearly this is another case to watch with interest.

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

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's Blockade Lifted

In December 2010 I wrote about the blockade imposed by HMRC on Christopher Lunn & Co (CLAC), a Sussex accounting firm.

"The firm claims that HMRC is refusing to deal with it, and will not allow it to file certain tax returns while it is being investigated.

According to the FT CLAC were raided by HMRC in June 2010 and the firm's files taken.

Despite the investigation going on for the last 6 months, HMRC have not told them why they are being investigated. CLAC suspect it is part of HMRC's much vaunted (unless of course you are Vodafone or a friend of Hartnett) anti avoidance campaign.....

Guilty until proven innocent appears to be the maxim of HMRC.

Should this department be given such powers, and be allowed to treat firms and individuals in such a high handed manner without due process?

Power of this nature, especially when in the hands of unelected bureaucrats, corrupts."

CLAC have now won their legal challenge against HMRC.

In a Judicial Review filed against HMRC, Mr Justice Kenneth Parker found in favour of Christopher Lunn and Company ruling that:

"The challenged decision should be quashed on account of the unlawful procedural failure."

The judgment reverses HMRC's decision, ruling it unlawful.

Here is the full text of the press release issued yesterday:

CHRISTOPER LUNN WINS LEGAL CHALLENGE AGAINST HMRC

· HMRC actions branded unlawful and unfair
· Effect of HMRC conduct undermined business confidence

LONDON, 16 February 2011: Christopher Lunn and Company, a Sussex-based firm of accountants, today won a significant victory in the High Court overturning a decision by HMRC to revoke its tax agent status. The judgment follows the instigation of an HMRC enquiry into Christopher Lunn and Company that began in 2009 and culminated in the HMRC deciding to withdraw Christopher Lunn and Company’s tax agent status in November 2010.

In a Judicial Review filed against HMRC, Mr Justice Kenneth Parker found in favour of Christopher Lunn and Company ruling that: “the challenged decision should be quashed on account of the unlawful procedural failure." The judgment reverses HMRC’s decision, ruling it unlawful.

Christopher Lunn and Company’s submissions centred on establishing whether HMRC had acted lawfully in withdrawing agent status without giving an opportunity to Christopher Lunn and Company to make representations first as to why its agent status should not be withdrawn. Despite giving Christopher Lunn and Company 28 days in which to make representations, HMRC withdrew agent status with immediate effect and on the same day that it notified Christopher Lunn and Company of its decision, wrote to clients of Christopher Lunn and Company advising them of its actions. Christopher Lunn and Company contended that HMRC's actions prejudged the issue and materially prejudiced Christopher Lunn and Company's position.

Following today’s ruling, Christopher Lunn and Company will be able to obtain its costs and will also be claiming damages from HMRC.

James Bullock, Tax Partner at McGrigors LLP, Solicitors to Christopher Lunn & Company said:

“Today’s judgment confirms that HMRC acted unlawfully in a procedurally unfair manner by deciding to cease dealing with Christopher Lunn and Company without giving them an opportunity to make representations first. In the light of an ongoing investigation, in respect of which Christopher Lunn and Company has sought to co-operate, it was most surprising that HMRC should act in this way. Only once before has HMRC unilaterally withdrawn agent status- and that was in a situation where the agent had actually been convicted of tax fraud. The High Court has quite rightly ruled HMRC's actions unlawful."

Christopher Lunn, the founder and owner of Christopher Lunn and Company, said: “Today’s decision is hopefully a major step towards clearing our names. It seemed to us that HMRC was seeking to close our business, threatening the livelihoods of 50 full and part-time staff. This is despite the fact that it was only in the run up to the High Court hearing itself that HMRC became obliged to disclose details of the case against us. We have been astonished at the allegations which HMRC have made which we believe are fundamentally flawed and inaccurate. This victory now gives us the opportunity to rebut the allegations that have been thrown at us."

“We have carefully built and nurtured our reputation over 40 years of successful and unblemished trading, and would like to thank those many clients who have continued to support us over the last nine months. We have been in a period of incredible uncertainty and immense pressure, despite not having been charged with any offence.”

Management and staff at Christopher Lunn and Company, which is based in Crowborough, East Sussex, are committed to continue to offer their full support to HMRC in order to dispense with its investigation at the earliest time. The company continues to trade and support its customers in the professional way that it has done in more than three decades.

For more information

On behalf of CLAC

David WilsonBell Pottinger Public Relations
+44 (0) 20 7861 2445
dwilson@bell-pottinger.co.uk


Neville Rawlings
Bell Pottinger Public Relations
+44 (0) 20 7861 2502
nrawlings@bell-pottinger.co.uk

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"

HMRC's Blockade

It seems that HMRC are enacting some form of "blockade" (usually regarded as an act of war when conducted on the international stage) against Christopher Lunn & Co (CLAC), a Sussex accounting firm.

The firm claims that HMRC is refusing to deal with it, and will not allow it to file certain tax returns while it is being investigated.

According to the FT CLAC were raided by HMRC in June 2010 and the firm's files taken.

Despite the investigation going on for the last 6 months, HMRC have not told them why they are being investigated. CLAC suspect it is part of HMRC's much vaunted (unless of course you are Vodafone or a friend of Hartnett) anti avoidance campaign.

In a letter sent by HMRC to clients on 30 November 2010, HMRC stated:

"The Commissioners of Revenue and Customs have come to the decision that in light of all the circumstances, there is no alternative other than to cease to deal with CLAC as an agent or representative for any of our customers. This includes communication in writing, via the telephone or by any electronic means."

A decision on the High Court civil action is due in the coming weeks.

Guilty until proven innocent appears to be the maxim of HMRC.

Should this department be given such powers, and be allowed to treat firms and individuals in such a high handed manner without due process?

Power of this nature, especially when in the hands of unelected bureaucrats, corrupts.

Tax does have to be taxing.

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"