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Where Taxpayers and Advisers Meet

NRCGT return

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Nov 06, 2018 5:16 pm

Two more NRCGT taxpayers (Marshall and Ironside) who had the misfortune of:

a) not having the HMRC person who dealt with Goochie's appeal look at their appeal cases; and

b) being allocated the wrong judge at Tribunal.

http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=10739

http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=10741

I'm still waiting for someone to identify Goochie's magic ingredient that turns NRCGT penalties into NRCGT penalties cancelled. I think Marshall and Ironside would also like to know.

I understand a case with an opposite result should be published shortly.

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Wed Nov 07, 2018 10:50 am

After a few damp squib tweets, HMRC has finally lit the fuse under the MTD communications by writing to all businesses within the scope of MTD for VAT.

The only consistency is inconsistency...did HMRC contact individuals who could be within the scope of NRCGT e.g. those who had completed non-resident landlord applications?

LSH
Posts: 23
Joined: Mon Nov 06, 2017 5:11 pm

Re: NRCGT return

Postby LSH » Wed Nov 07, 2018 11:20 am

Yes - inconsistent indeed.

On another note, I got an email out of the blue from HMRC a couple of days go advising:

"Welcome to HMRC’s help and support email service. We will send you timely and relevant emails to help and support you, every step of the way. In our emails you can expect reminders about key events in the tax year, including specific help and support for self assessmentif you need to complete a Self Assessment tax return by 31 January. We’ll also signpost you to relevant information from other government departments."

The email advised that "to receive the right information at the right time" I needed to register for one or more of their subscriptions.

I logged in to find out more, excited to see if those 'subscriptions' or 'timely and relevant emails' might extend to NRCGT (in the hope that others wouldn't be caught in the way I nearly was). Sadly though, the various options and subscriptions that you can opt into do not include anything at all for non-residents (or not from what I could see!. Thus, it is very unlikely that this endeavour by them will have any impact whatsoever on the circa third of affected non-residents who are still submitting their filings late......

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Nov 13, 2018 10:25 am

More negative press for HMRC:

Non-Resident CGT Returns and Other Disposals of UK Dwellings

There has been no end of criticism about the penalties for the failure to submit Non-Resident CGT returns and the excessively onerous obligations. HMRC have no sympathy; taxpayers ought to know the rules because they are all quite clear – except that not even the judges
can agree what those obligations are.

Anyway, they have found a way to resolve this difficulty. They obviously did not want to abandon the system, or admit that it was flawed (and of course they could have done both), so from 6th April 2019 the capital gains tax payable by a non-resident person on the disposal of UK residential property must be paid 30 days after completion. I guess the expectation is that the solicitors will deal with it just like they do with SDLT. That will solve the problem. (And there is a little note which says that this 30 day payment date for CGT on residential property will apply to UK residents from 6th April 2020.)

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Nov 22, 2018 3:32 pm

HMRC's Welsh bias over non-residents?

Angela MacDonald DG, HMRC Customer Services, has just written to Welsh taxpayers to advise them of the Welsh rates of income tax. She clearly did not agree with the thoughts of the Judge copied below:

But it can’t be looked at as a one-off: if HMRC were obliged to warn non-resident landlords of this change, it would follow that HMRC have an obligation to individually warn all potentially affected taxpayers (who can be identified) of all potentially relevant changes. Yet parliament cannot have intended to give HMRC such an onerous (not to mention expensive) duty. On the contrary, parliament must expect citizens to be proactive in taking responsibility for ensuring they obey the law: otherwise few laws would be obeyed. So while HMRC might have a legal duty to publish significant changes on their website, I do not think it was actually unlawful for HMRC to fail to write to all non-resident landlords individually. Therefore, I do not consider that HMRC were in breach of any duty in failing to write to the Heskeths to warn them of the new NRCGT reporting requirement.’


Taxpayers are supposed to receive even-handed treatment. Is Angela wasting taxpayer's money or was the Judge's view claptrap?

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Nov 22, 2018 3:36 pm

Sorry...taxpayers' money

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Dec 04, 2018 10:18 am

A very good example of the charge below concerns NRCGT/taxpayers receiving treatment that is not even-handed.

The available evidence suggests HMRC are not treating NRCGT taxpayers even-handedly as required by the Taxpayers Charter (see Goochie example contained in this thread and the dramatic drop in successful NRCGT appeals from over 30% to 3%). When this point was made to Jon Thompson (the person at HMRC responsible for ensuring the Charter is followed) he swatted it away and refused to review the matter i.e. HMRC marking HMRC performance. It was even admitted that they fail to record why appeals are accepted.

This Charter report structure has been challenged as HMRC “marking
its own homework
”.154 ICAEW commented that “The Committee …
has external members but is nonetheless a direct sub-committee of the
HMRC Board.”155 The Charter Committee has had limited oversight and
resource compared to the scale and complexity of HMRC’s operations. It
has not apparently picked up the strength of feeling about the change in
HMRC’s culture and deterioration in customer service. It is unclear whether
the Charter Committee has fulfilled the role Parliament intended for the
Charter. It needs to focus more on the issues of greatest concern to HMRC’s
customers.
153. HMRC recently announced that the Charter Committee would be
restructured into a Customer Experience Committee.156 Further details will
follow but the intention is to strengthen oversight.157 A change needs to be
made in the way the Committee operates with more input from the major
tax bodies and the involvement of the Adjudicator. Their perspective on how
HMRC is performing against the Charter standards is more important that
HMRC’s.

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Fri Dec 07, 2018 10:22 am

Further to my posts on 22 November, the LITRG and CIOT both appear to support Angela's publicity drive concerning the Welsh rates of income tax:

The LITRG and CIOT joint response emphasises the need for communication and publicity in advance of April 2019 as essential for both Welsh taxpayers and their employers. Publicity for the introduction of the WRIT has, in our view, yet to start in earnest. In addition, it is starting from a low base of understanding; a recent survey looking at the experience of Scottish taxpayers amply demonstrates the poor awareness and understanding of the Scottish Income Tax two years after it was introduced, underlining the need to raise awareness.

This must therefore equate to three 'claptrap' votes for the Judge's thoughts suggesting HMRC is not required to contact taxpayers about tax changes.

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Wed Dec 12, 2018 6:35 pm

The following was contained in HMRC's latest agent update:

Welsh rates of Income Tax (WRIT) In November 2018 HMRC wrote to over two million customers, with their main residence in Wales, telling them about WRIT. All people living in Wales subject to Income Tax, including individuals who earn below the Income Tax threshold, should have received a letter.

It is tangible proof that HMRC do not treat taxpayers even-handedly because as has been well documented on this thread, no such publicity drive was offered to non-resident taxpayers. This resulted in thousands being issued with significant penalties for a filing obligation they didn't know about.

As can be seen from the tribunal summary below (thanks to NRM), some judges have appreciated how poorly this new filing regime was rolled out and cancelled the late filing penalties accepting ignorance as a reasonable excuse. Sadly, near identical cases have been on the end of an opposite result which just proves that the taxpayers charter pledge stating taxpayers will be dealt with even-handedly is absolute poppycock. It is a shame it is not possible to remove the person responsible for ensuring the charter pledges are met (currently failing miserably) with just 48 letters.

In Ann Rowan-Smith v HMRC [2018] TC6623 a non resident successfully appealed late filing penalties. She failed to report the disposal of her UK property within the 30 day deadline as she assumed that gains would be reported under Self Assessment.

The taxpayer lived in Canada and she sold he UK residential property
Unaware of the new 30 day reporting obligation for Non-Resident Capital Gains Tax (NRCGT) she filed her NRCGT return after she realised that the gain could not be reported via a self assessment return.
HMRC assessed her with £700 of Late Filing penalties.
She appealed against the assessment claiming that she had a Reasonable Excuse for her failure: she had made a genuine mistake because the new filing requirement was not well publicised. Further her conveyancing lawyer had not advised her of the filing deadline and she was entitled to expect that a professional conveyancing solicitor would advise her on her legal obligations in relation to the disposal.
Judge Beare found:

There was no reason why the Appellant should have sought the advice of a tax expert in relation to the disposal, she had not made a chargeable gain and so she thought she would be able to deal with the disposal perfectly adequately in her self-assessment return without recourse to expert advice
HMRC did not accord as much publicity to this new filing requirement as, in retrospect, they might now be wishing. The fact that the Appellant’s solicitor, who, although not a tax expert, was familiar with conveyancing, appears to have been unaware of the new filing obligation tends to support this conclusion.
Given the relative obscurity of the requirement in question, more publicity could have been given to its introduction and that it is this which has prompted the volume of appeals which have now occurred
It was reasonable to believe that that tax would be collected in the same way as capital gains tax in general.
The appeal was allowed on the basis that the taxpayer had acted reasonably and made a genuine mistake.

etf
Posts: 521
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Dec 18, 2018 11:12 am

The post below is six months old, but the Tribunal case does not appear to have been published...is this unusual?

We have received this morning, by e-mail, confirmation that the First Tier Tribunal Judge has upheld, in full, our appeals against Late Filing Penalties imposed by HMRC; common sense has prevailed at last! 20 months after the fines were imposed and many hours, on our part, preparing our case at each level of appeal. The case was heard on 11 June by Judge Charles Hellier. The sense of relief is amazing! For those of you going through the process, do not give up hope!


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