Tax Investigations, Enquiries & Disputes
Many of our clients are subject to a full enquiry by HMRC which involves a detailed examination of their business, and sometimes personal records. Where HMRC deem the matter to be more serious in nature they will often offer to resolve it using the Contractual Disclosure Facility.
We do not believe that it always follows that because a client’s records are not in an order which immediately satisfies HMRC, that profits must be understated. We have always sought to establish the facts; We are not here to make judgments. Our sole purpose is to assist our clients to bring their tax affairs up to date, to mitigate any penalties where additional tax is shown to be due and to ensure that their businesses can continue relatively unscathed and without being “named and shamed” by HMRC.
Nor do we believe that HMRC are always entitled to all of the information and documents they request. Before engaging in what can be a costly exercise for our clients we will always carry out certain basic checks which include; is HMRC in time for making an enquiry, are the documents and information requested reasonably required for the purpose of checking our client’s tax position? We will not, of course, obstruct HMRC in their legal processes but we are not prepared to let them carry on without due regard to their legal powers and limitations.
We will always challenge HMRC’s technical arguments if we believe they are weak or wrongly applied. It is our experience that HMRC will often argue from their internal guidance when alternative interpretations can be equally persuasive.
Applying these principles has saved our clients considerable sums of money.
Appeals & Tribunals
We recognise that not all disputes can be resolved by negotiation, particularly where there are complex technical and tax planning issues involved. Such disputes may, therefore, proceed to the Tax Tribunal.
We will give you an honest assessment, based on our experience, of your chances of success in any dispute with HMRC. We are fully conversant with HMRC’s Litigation and Settlement Strategy and their attitude towards resolving disputes. If we do not believe your appeal will be successful at the Tribunal we will advise you accordingly and we will discuss your options for achieving the best possible result.
Where a hearing at the Tribunal cannot be avoided we will take you through each stage of the appeals process which can include the preparation of detailed grounds of appeal, witness statements, skeleton arguments and agreeing Directions as to how the appeal will progress to a full hearing.
PAYE & Benefits Reviews
We assist businesses faced with, often routine, reviews and inspections of their PAYE and Benefits records.
Common problems faced by our clients include the non-reporting of staff entertaining (e.g. Xmas parties, “away days”), certain gifts to employees, provision of occasional overnight accommodation close to their normal workplaces, taxis home and excessive payments made for travelling and subsistence. These reviews can be extremely time consuming even for smaller businesses and our aim is always to ensure that they are dealt with as expeditiously as possible.
We offer “health checks” for those clients who are not currently being inspected by HMRC but who are not wholly comfortable that their systems have picked up all taxable benefits which should be reported on forms P11D or which may be included in a PAYE Settlement Agreement.
Employed Or Self-Employed?
It is not normally sufficient for a business to pay, say, a consultant, as though they are self employed just because it suits both parties to do so. We are fully conversant with all of the factors used to determine employment status and will advise how best to put these into practice where necessary.
We also advise businesses who are in dispute with HMRC as to the employment status of individuals paid by them as self employed.
National Minimum Wage Inspections
The majority of inspections start as a result of former employees querying their entitlements. We have found that HMRC always investigate any such complaints.
Our experience shows that most clients comply with the legislation but confusion often arises where extra allowances are paid for employees who have attained certain qualifications (e.g. First Aid certificates) and others whose work is seasonal in nature.
We have assisted clients in establishing the amounts of any underpayments and that these are rectified, at current rates.
HMRC have entered into agreements with a large number of countries, which have commonly been used as tax havens, in order to exchange information concerning UK individuals who have investments in those countries.
HMRC have also obtained copies of information which was stolen from overseas banks and trust companies which holds information concerning UK individuals.
Some of our clients have investments in the Caribbean, the Far East, Switzerland, Liechtenstein, Gibraltar, the Channel Islands, the Isle of Man and other less well known jurisdictions. Where the source of the investments or the income arising on them has not previously been disclosed to HMRC, we have assisted those clients in taking advantage of the various offshore disclosure facilities offered by HMRC. This has had the advantage of regularising their tax affairs with minimum penalties and, for many clients, avoided a potential problem being passed on to their children and grandchildren.
Legislation has been introduced to give tax guidance to individuals coming to the UK and those that are planning to leave. Even if the move abroad is unlikely to be permanent it can still affect that individual’s UK tax status.
Some of our clients have left the UK following the sale of their business and have been challenged by HMRC being of the opinion that they did not actually make a distinct break (from the UK) for tax purposes. We have vast experience in assisting clients in producing a high standard of evidence in support of their claim to be non-resident.
We can also advise individuals seeking to leave the UK of the appropriate steps they should take to help avoid any future issues regarding their tax residency.
Complaints About HMRC
HMRC do not always get it right and often cause clients to incur unnecessary fees.
Where we believe that HMRC have acted unreasonably resulting in a financial loss to our clients we will assist them in making a claim for compensation and have experience of involving the Adjudicator when necessary to reach this aim.
Prosecution & Raids
Parliament has tasked HMRC with bringing more prosecution cases to the Courts. There are a number of criteria which HMRC apply before embarking upon a prosecution but once started it is virtually impossible for clients to avoid explaining their actions before a judge.
Whatever the offence, we will do our best to ensure that the correct amount of tax is established and all mitigating circumstances are put forward before the trial. This can often help in reducing the client’s sentence.
We only use specialist barristers versed in tax prosecutions for clients in this position.
Should your business or home be raided by HMRC we will put you in immediate contact with specialist lawyers who can advise and assist on how to deal with the raid.
We offer a short training programme for clients who wish to know their rights and what to expect and what to do in the event of a raid by HMRC.