This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Help! Sole trader HMRC investigation

classicmechanic
Posts: 15
Joined: Sun Dec 03, 2017 5:51 pm

Re: Help! Sole trader HMRC investigation

Postby classicmechanic » Thu Dec 14, 2017 6:19 am

Thankyou again you lovely people.

Well.. here's email excerpt from today..

Me: 'you are extrapolating figures as far back as tax year end 2010, please quote the rules to me as I am led to believe by a consultant that you can only go back up to 6 years. Would my 2008-2009 trading figures (for Tax return year end Apr 2010 ) not be outside of this?'

Them: 'Whilst your behaviour during the year under enquiry was caseless, [sic] an assessment to recover under-assessed or over-repaid tax can be made for 6years. For this reason, the assessment raised for the tax years ending 5 April 2010 and 5 April 2011 are invalid. I sent today by post a penalty explanation and schedule to you .. from 6 April 2011 to 5 April 2016.

I think that's their way of saying ' oops, we hoped you wouldn't notice.. umm here's the correct one'
Not convinced they have explained the dates correctly. I think they are saying they are still including year end Apr 2011?

wamstax
Posts: 1844
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Help! Sole trader HMRC investigation

Postby wamstax » Thu Dec 14, 2017 9:58 am

No this means they are starting with the year ended 5th April 2012 (I.e. commences 6th April 2011)
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

wamstax
Posts: 1844
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Help! Sole trader HMRC investigation

Postby wamstax » Thu Dec 14, 2017 1:44 pm

It's a shame and disquieting to see alleged HMRC officers handling investigation cases and getting the basics wrong. How often do poor "tax evaders" that are not represented by experienced tax investigation experts suffer at the hands of HMRC officers trying to maximise their take. I have no doubt also (and seen it as well) that there are a few so called "tax investigation accountants" out there that would miss the same basics so again proves the point that paying somebody (or not in the case of www.taxationweb.co.uk ) that knows what they are doing is well worth it and value for money. Glad you have had your Christmas present early and hope you get the other aspects resolved satisfactorily.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

classicmechanic
Posts: 15
Joined: Sun Dec 03, 2017 5:51 pm

Re: Help! Sole trader HMRC investigation

Postby classicmechanic » Thu Dec 14, 2017 4:12 pm

interesting. Well there's a saving right there! :D

Their guestimate for extra rental income then drops from £27,100
to £19,500 but it's actually only £11,350 looking at the actual figures . I shall be sending this to them.

On with the rest of the work..

classicmechanic
Posts: 15
Joined: Sun Dec 03, 2017 5:51 pm

Re: Help! Sole trader HMRC investigation

Postby classicmechanic » Wed Dec 20, 2017 5:00 am

I have calculated and submitted accurate figures to them by snailmail and copied via email. I have enclosed tables etc for them and also for example a photo of my Dads bank statement from 2014 showing a gift of £500 leaving his account and arriving in my account same day. (One of the payments they were asking the original of and assuming was undisclosed income)
They have emailed saying i have to 'make a formal appeal' well i don't know how t hey expect me to spell it out for them anymore than what I have done. I have told them I do not accept their figures.

According to my figures that i can mostly back up (abridged for this post..):

Amount in 2015 trading figures that either should have been included , or are unknown. £560
This is less than 2% above my original figures.
Extrapolate to 4 other years as a percentage increase : total for all 5 years £2000
Add 11,350 extra property rental profit over 5 years.
£13,350
20% tax on that would be about £2700
+interest + penalty 18%
Not sure what that would come to as I've probably not worked that part out right but hoping total I end up giving them is under 5K.
They won't be too pleased about that if they were trying for 25K.
Lets see just how much they want to drag their feet with this.

wamstax
Posts: 1844
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Help! Sole trader HMRC investigation

Postby wamstax » Wed Dec 20, 2017 5:12 am

Just say that in accordance with their letter you are appealing against their decisions and determinations on the basis that their figures are incorrect and excessive (in that they include years for which they do not have the power to recover and items they have incorrectly assumed to be trading receipts when the evidence shows that they are not taxable receipts) and the correct figures are as now provided by yourself.

Invite them to rework their figures and provide you with revised figures that you will consider for agreeing figures for settlement. Also add that if they are not prepared to accept your appeal and revisions to their figures then you wish an independent review undertaken by an independent reviewing officer that has not been previously involved in your enquiry.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

wamstax
Posts: 1844
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Help! Sole trader HMRC investigation

Postby wamstax » Wed Dec 20, 2017 5:17 am

You could also suggest that to resolve matters for the enquiry year you would now accept a 50% addition (I.e. if unknowns are 650 then 325) of the unknowns and given that the additions are less than 2% of turnover for the year of enquiry there should be no scaling back of the “trading profits” although the revisions for the rental are as you now have revised them. See where that takes you.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

bd6759
Posts: 2965
Joined: Sat Feb 01, 2014 3:26 pm

Re: Help! Sole trader HMRC investigation

Postby bd6759 » Wed Dec 20, 2017 10:43 am

Not a good idea to ask for an independent review at this stage. That sets a 40 day clock in motion. If they can't review in that time, the original decision stands.

If the appeal is in time, it must be accepted. Don't forget to ask for postponement of some or all of the tax charged by the assessments.

wamstax
Posts: 1844
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Help! Sole trader HMRC investigation

Postby wamstax » Wed Dec 20, 2017 11:11 am

Hi bd
Comment regarding review was if they were not prepared to accept the appeal and put in on basis that if they had any doubt in accepting appeal it would tip the balance in OPs favour.

Independent reviewer isn’t going to let a case go to FTT where they have invalid assessments and penalty determinations. They would probably send it back to the investigators manager with recommendation that all adjustments proposed by OP are complied with
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

classicmechanic
Posts: 15
Joined: Sun Dec 03, 2017 5:51 pm

Re: Help! Sole trader HMRC investigation

Postby classicmechanic » Wed Dec 20, 2017 5:04 pm

Thanks again all.
This just in..
'Dear Mr _______ I acknowledge your appeal dated 19 December 2017. I note the content of your appeal and your advice that you have sent documents. I will await the documents and given the upcoming festive period I will be unable to review matters until the New Year. I anticipate in a position to provide a full written response by 31 January 2018.


Return to “Tax Investigations and Enquiries”