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Mark McLaughlin considers HMRC's latest marketing campaign, aimed at people who are deliberately not paying the right amount of tax. HMRC published a news release on 12 November headed HMRC Closes in on Tax Cheats. This announced "an advertising campaign warning tax cheats to declare all their income before it is too late". The Exchequer Secretary to the Treasury, David Gauke, is quoted as saying: "Most people play by the rules and pay what they owe, but HMRC is cracking down on ... Continue Reading

A taxpayer may be eligible for a 'special reduction' of penalties or even for the penalty to be suspended - Mark McLaughlin CTA (Fellow) ATT TEP explains these rules for the mitigation of penalties for tax return errors.   Introduction Most tax practitioners will be familiar by now with the penalty regime for errors in tax returns and other documents (FA 2007 Sch 24). The level of penalty broadly depends on whether an error was careless, or deliberate but not concealed, or deliberate ... Continue Reading

Employers will not have to report on or before payment is made under the new RTI regime in some cases, such as for cash payments to night catering staff. Full Payment Submission Not Immediately Required One of the key principles of the new "Real Time Information" or RTI regime is that employers report the pay and tax details for each payment to each employee, on or before the payment is made. However, as several parties including the professional bodies have pointed out, this will not ... Continue Reading

Growing numbers of people on low and moderate incomes are being misled and even forced into using limited companies in order to obtain work, and risk being caught in anti-tax avoidance legislation, say tax campaigners. Increasing Concern The Low Incomes Tax Reform Group (LITRG) is calling on HM Revenue and Customs (HMRC) to pursue organisations that wrongfully force people to use personal service companies to obtain work.   LITRG’s concerns are based on evidence of problems ... Continue Reading

Does HM Revenue & Customs have the power to demand private bank statements  in a tax enquiry, asks Mark McLaughlin CTA(Fellow) ATT TEP. Introduction A controversial aspect of enquiries by HM Revenue and Customs (HMRC) into personal tax returns is a request to see the taxpayer’s private bank statements. HMRC’s extensive information and inspection powers apply (among other things) to documents which are "reasonably required" to check the taxpayer’s tax position ... Continue Reading

Concern is growing as to the implications for unrepresented taxpayers engaged on certain types of "temporary" work contracts. Nice to be back! A number of matters developed towards the tail end of the week, with more news on Personal Service Companies, and HMRC apparently leading a(nother) investigation into persons with offshore accounts at a household name bank. Of course it is important to recognise that the mere ownership of an offshore account is not of itself a crime, or even indicative ... Continue Reading

Yesterday, the BBC published a review of its engagement of freelancers' contracting arrangements. The review covered both on-air and off-air individuals contracted in the financial year 2011/12. The BBC said that one of its key findings was that, although its existing policy has proved to be inconsistent, there was no evidence that the BBC used personal service companies to aid the avoidance of Income Tax or National Contributions. Nevertheless, ostensibly to counter the public perception ... Continue Reading

Peter Vaines of Squire Sanders comments on the McLaren penalty case and also on a case where HMRC tried to assess National Insurance when there was no charge to Income Tax under the "benefits in kind" legislation. Penalties Deductible Expenditure? Those with an interest in Formula 1 will remember that a little while ago some confidential documents relating to Ferrari were found in the possession of an employee of McLaren. The FIA decided that there had been some impropriety and imposed ... Continue Reading

Andrew Needham of VAT Specialists Limited explains how to claim back foreign VAT incurred for business purposes. New Electronic System - in English! At some time most businesses send staff on sales trips or to attend exhibitions in other EU Member States. All of these countries have a VAT system so you will be incurring VAT costs that you cannot claim back on your UK VAT return.  An electronic refund system was introduced on 1 January 2010 replacing the previous paper based system. ... Continue Reading

Business Records Checks are being re-launched by HM Revenue and Customs (HMRC) today, following a review and extensive stakeholder consultation. The substantially redesigned Business Records Checks programme now involves a new step-by-step approach, with a much greater emphasis on education and support. Businesses need to keep records which can clearly demonstrate they are meeting their tax responsibilities. From today, HMRC will send letters to businesses it believes may be at risk of ... Continue Reading