HMRCs, Tax Enquiries &
From 1 April 2009 - Compliance Checks
Inland Revenue and Customs & Excise are now one entity: HM Revenue & Customs (HMRC). Enquiries and 'reviews' into taxes such as Income Tax, Corporation Tax, PAYE and VAT are stepping up. In our experience these can feel increasingly like 'no nonsense' VAT Inspections with criminal and not the existing civil powers. In our opinion Customs & Excise is winning the internal battle for HMRCs tax enquiry culture. The government has allocated extra resources into recruiting 'outside' qualified trained staff, to augment existing resources within Customs & Excise and HMRC's entire operations. This has created in the process new specialised offices and concepts of 'health checking' any given businesses operations.
Today's international conflicts and economic recession also make their own demands on the taxpayer and the country too. 'Self Assessment' had originally brought to the fore the so called 'DIY' concept of filing one's own tax returns. Many can with patience complete the form- despite the effect it may have on their own leisure time! However, where most of the DIY tax filers' come unstuck is when an enquiry or review is officially notified to them and they have no professional advice to hand.
Its a fact, no one inexperienced can handle a tax enquiry or review.
HMRC are just by implication misleading you into thinking you can. All a bit of an illusion here. It is easier to defend one's self in a criminal court of law and sway a judges opinion than for you as a lay person to work through the procedures of a civil tax enquiry. Its that specialised. Not surprisingly, many who are subjected to these enquiries do not have a clue as to their rights; what is going on; or even; what is expected of them from mainly ambiguous requests usually made of them for information by HMRC Inspectors. Result? Unfortunately, usually personal meltdown. Ultimately, all this just works to the benefit of the Treasury's purse. Any perceived breaches by the taxpayer can also lead to sometimes, some very punitive and unfair discovery assessments. Ironically, however, most breaches are due to the self-assessing taxpayers' negligence or, if you prefer; the enthusiastic amateurs genuine tactical mistakes! Again, this typically results in more tax interest and penalties being raised than that just in the original year of enquiry. Anything up to six years prior, during which no similar enquiry was done.
Ouch!
So having by your side an experienced professional to fight any attempt by an Inspector of HMRC to 'break' your tax return or the business accounts is a necessity. No matter how romantic your concept of the misnomer that is the Self Assessment Tax Regime.
If you innocently complete a return negligently- then your culpable. Punitive stealth type taxes will inevitably follow.
This commentary is based only from HMRCs point of view as we see it. Composed from our last 20 years of experience. Its a revelation to most. A declaration of war to others who misunderstood. Again all in our 'objective' opinion of course. How could we be wrong? Or not be telling you mostly the whole truth? You decide. One thing we are not trying to be though is 'bolshie'. We respect the law. Tax in this case. In return its enforcers should respect us.
It is said we are all asked to pay the fair tax, subject to each individuals unique circumstances. The rest of our hard earned cash we can keep to spend on ourselves, our family or save. Hardly revolution or heresy. In other words the old maxim pay Caesar only what Caesar is due? If, as rumoured, HMRC Inspectors can be placed under so much false 'performance related' pressure to extort more taxes from those most vulnerable in our Society, then just what is the fair tax? Where is the consistency? Multi-national corporations employing tax specialists, (and enjoying some attractive government taxpayer handout incentives), endlessly try not to pay their fair share, but do bring millions of us jobs which in turn are taxed at source mainly as employees. Multi-nationally, big business is politically 'a harder nut to crack' if not impossible or even globally inexpedient to approach. Recently HMRCs claimed to be targeting them, albeit at the smaller end, of the UK scale. So who takes up any slack here in the meantime? The bread and butter tax cases that's who. Maybe you?
All information given in this section should not be taken as our advice applying to a particular situation that we have not first advised you upon. We accept no liability resulting on your reliance of this anecdotal type information, as fact, when it is applied to any tax, or accounting matter that we have not first professionally advised you upon.
