Postby LozaACCS » Wed Aug 19, 2015 8:46 pm
The 97/98 liability appears to be app 5K, you have not said whether it includes interest and penalties, I guess it would.
I cannot see that the discovery rules are in point since no undeclared income appears to have been discovered, it seems that HMRC have simply left a debt outstanding.
I think a Higgs type challenge would not be cost effective (and I am sick of arguing about it).
I personally would press HMRC to show what (if anything) they did about collecting the debt, your friends non residence status in the period may be relevant.
If they did nothing, then I would consider a claim to the tribunal on the basis that no effort was made to collect the debt and your friend was unaware of it, on that basis it should be set aside, the claim for overlap relief could not be made, I would also suspect that transitional overlap relief would have been in point.
If you supplied HMRC with details of the contractor concerned and the amounts deducted this could be a further mitigating factor, good luck