Informing on innocent taxpayers

[burnbanks]

My mother recently received a letter from HMRC asking about alleged rental income. The text is below, for those who don't know what such a letter looks like.
We presume HMRC has received information from an anonymous informant. We think it is probably a spiteful former spouse - she once sent letters to my employers and friends making all sorts of nasty allegations.

I wonder if readers can enlighten me on some points:
Why didn't HMRC look before it leapt and ask the Land Registry if any properties were registered to my mother? In fact, she doesn't own any properties at all.
Don't HMRC get the end of year balances for every bank account holder, and couldn't they have looked at my mother's? They would not have found anything that looked like rental income going into her bank account. Her only income is her pension.
She has answered all HMRC's questions in the negative. What are they likely to do next?

We know that some years ago, the ex-spouse had undeclared rental income of her own from one of her properties. Would readers be tempted to play tit for tat and inform on her to HMRC? My own view is that Britain is well on the way to becoming an authoritarian, Big Brother, Stasi-like society and I would prefer not to encourage this sort of behaviour.

Text of the HMRC letter:
"I understand that you have been in receipt of rental income. Rental income should be declared each year on a self-assessment tax return form. Unfortunately I have been unable to trace a self-assessment tax record for you.
Could you therefore please let me know your 10 digit self assessment tax reference number. If you have not yet registered for self-assessment, please let me know:
the addresses of your let properties
date you purchased the properties and the amount paid for them
date you sold the properties and the amount received for them
source of the capital that gave rise to you purchasing the properties
the date you commenced to receive letting income.
whether you are still in receipt of letting income.
full name/s of the tenant/s living in the properties
full details of of how rent is paid over to you on behalf of the tenant/s. If it is paid by xxxxxx Council as Housing Benefit, please supply me with full details (names) of the recipients of such benefits.
If you would like to discuss the matter please contact me on the above number.
Please let me have your reply within the next 30 days."

[King_Maker]

Assuming your mother has not received any rental income, I would recommend that this Enquiry be settled asap.

I would suggest that your mother arrange an early meeting with the Tax Inspector and for you (or someone else suitable) to accompany her.

[pallet]

ASK FOR A COPY OF YOUR MOTHER FILE THAT THE REVENUE HOLD

[Lambs]

P,

Please don't "shout." It's in the forum rules. And I'd be intrigued to know how one can obtain a copy of HMRC's file without resorting to cloak-and-dagger, James Bond spy-camera tactics.

HMRC has some fairly broad exemptions regarding its files, despite DPA/FIA. You can see more at

http://www.hmrc.gov.uk/leaflets/cop21.htm

Regards,

Lambs

[pallet]

WRITE TO THE REVENUE,S DPA DEPARTMENT AT NEWCASTLE AND THEY SEND YOU EVERY THING THEY HOLD

[burnbanks]

Kingmaker - thanks for the advice - if the taxman requests a meeting that's fine (but she hasn't) so long as she comes to see my mother not the other way round. The only travelling my mother ever does is by ambulance to the local hospital!

[burnbanks]

Pallet - I wouldn't have thought they hold anything at all on my mother's tax affairs - hence the fishing expedition.

[pallet]

YOU SAY THEY DO NOT HOLD ANYTHING BUT THE FILE WILL SHOW IF THE REVENUE HAVE A INFORMANT AND WHAT THEY HAVE TOLD REVENUE ABOUT YOUR MOTHER

[Lambs]

B,

I refer you to my earlier post. If you go to the HMRC website

http://www.hmrc.gov.uk/

and search under "Freedom of Information" or "Data Protection" then you will soon be able to determine for yourself the extent of the statutory protections afforded HM Revenue & Customs, in respect of requests for information from the general public or even taxpayers about their own affairs.

With regard to your mother's tax affairs, you are correct that HMRC can obtain a wealth of information, should it so desire, from other sources. However, your average Inspector finds it easier simply to ask the taxpayer.

I should recommend that you ask your mother to sign a form 64-8, authorising HMRC to liaise directly with you. Although your mother will still receive all relevant correspondence, you will receive a copy as 'agent' and they will be able to discuss matters more freely, with you.

http://www.hmrc.gov.uk/forms/64-8.pdf

You may also want to consider speaking to a professional tax adviser.

Regards,

Lambs

[King_Maker]

As your mother is not able to travel, I agree with Lambs that acting as your mother's agent (assuming she and you are happy to do so), via HMRC's form 64-8 is a good idea.

Volunteering a meeting can be a good tactic - and can avoid protracted correspondence. Such a meeting can take place at a Tax Office near you - irrespective of where the Tax Inspector is based.

I see no need for professional advice at this stage.