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Inland Revenue penalty madness

It’s obviously the season for HMRC penalty madness, whether it be in respect of the Construction Industry with CIS late filing penalties or self assessment penalties, half a rain forest is being wasted in incorrect paper penalties. However, HMRC have stated that it is no longer the computer that is at fault (I always mistakenly thought a human had to programme/operate a computer but no, they have a mind and life all of their own!), instead it is human error caused by a lack of following procedure. Now anywhere else and you would be questioning a) the training and b) the ability for a complete non review process before these penalties are sent out.

How bad can it be, well one poor sole in Cambridge obviously has an obsessive stalker in the form of HMRC as he received 52 envelopes from HMRC, each containing 4 letters demanding sums ranging from £100 to £3,000 (grand total £39,000).

The taxpayer is appealing the fines, which have been suspended pending a final decision.

HMRC told the Cambridge News:

“Incorrectly issued penalties are not the result of a system problem but failure to correctly follow procedure – this is being put right.“

March 8, 2010 at 12:08 pm | Employment Status, Tax Advice, Tax Investigations | No comment

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Salary Sacrifice opportunities are available to SAVE you real money

At a time when the country is still not out of recession (in my mind a 0.1% increase does not give cause for cracking open the champagne) then opportunities to make savings for both employers and employees should be grasped firmly with both hands and now is the time to do it. So whether it be

• pension salary sacrifice
• childcare salary sacrifice – still available at the basic rate
• training salary sacrifice
• car salary sacrifice
• Cycle to work schemes

now is the time to jump aboard whilst the ship is in port for any of the above salary sacrifice arrangements

March 1, 2010 at 10:29 am | Salary Sacrifice | No comment

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Inland Revenue compliance audits are changing

The way HMRC carry out the following, are going to change beyond recognition:

• Employer compliance reviews
• Tax investigations
• Tax enquiries
• PAYE/NIC investigations
• PAYE investigations

and if you’re not up to speed it’s going to be a real shock to the system. If you’re advisor is unaware then be really concerned and give EICG a call on 0800 917 9176 to see how we can help you: before and during a visit.

HMRC Cross tax reviews is just one example of this, so moving away from potentially three visits in a year to a visit combining PAYE/NIC, VAT and Corporation tax. For very large businesses this has been trialling with a team of HMRC officials visiting (oh what joy) and is based on extensive reviews of other tax systems across the world. However, this is likely to be cascaded downwards to other sizes of business with the use of a newly retrained general tax practitioner – as you can imagine this has pro’s and cons as anyone who deals with a specialist area of tax knows it is just that, specialist and not generalist, so my advice is don’t let someone “have a go” on your behalf use specialists, as we have at EICG to cover these areas.

Keep on reading for further updates on what is an ever changing Inland Revenue approach to solving the national debt!

February 17, 2010 at 11:14 am | Tax Investigations | No comment

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Construction Industry penalties to be challenged

How many of you have actually looked at the drachonian penalty regime attached to the Construction Industry? Quite frankly if you’re sad enough to sit down and work out the completely disproptionate level of penalties that can be charged for minor infringements then it is absolutely staggering that this regime was allowed in the first place but a challenge is going to be heard because of the case of  SKG (London) Ltd v HMRC. Judgement was handed down on 3 December 2009, in which the Tribunal for the first time analysed the new scheme in light of safeguards in European Law which protect against arbitrary or disproportionate penalties.  The Judges in the case ruled that: “…the Tribunal is left in doubt as to whether or not the statutory provisions for the penalty for late filing of a return…satisfy the requirements of the Human Rights law principle of proportionality”.

Neither side appointed Counsel for the hearing, so the Tribunal has not yet had the benefit of detailed legal submissions and has adjourned its final decision until further legal arguments have been considered – this should be sometime between March and July 2010.  So, watch this space, as it seems that HMRC could be in for a difficult time and the entire new late filing penalty regime could be under threat.

January 27, 2010 at 8:05 am | Employment Status, Tax Investigations | No comment

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Tax Investigation disclosure opportunity extended

HMRC almost on a daily basis have had to issue notes on their Tax Health Plan (strange term for what is a tax investigation programme into the medical profession, let’s have a spade is a spade). The latest is that dentists are to be included and they have been generous enough to say that other such professionals can come forward too – but not with the same protection regarding penalties etc – do they think people are stupid!

If you do have a problem then you need to take sound professional advice before you embark on a disclosure – you wouldn’t operate on a patient if you didn’t have the necessary training, so don’t dabble with this

One major concern that is shining through on this disclosure opportunity and the “incentives” being offered is why is it being restricted to the medical profession? You may think that this is HMRC’s project of choice at the moment so they are focusing on this – not so, fish and chip shops are right in the firing line but guess what no disclosure benefits for these people – something doesn’t quite sit comfortably with this – are we making moral judgements about who is honest and who isn’t by the profession they have chosen?

January 19, 2010 at 3:15 pm | Tax Advice, Tax Investigations | No comment

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HMRC investigation – the phone’s ringing!

HMRC have made cutbacks and are still doing so, they have removed the personal contact with local offices to develop call centres (don’t we just love those, press 1 for yes – oh no it’s spreading) but HMRC have excelled themselves when it comes to the task of answering the phones.

Most companies have a policy of answering the phone within a certain amount of rings, not HMRC if latest stats are anything to go by – only 43% of calls were answered and if that wasn’t bad enough, in the child tax credit renewal period only a third of calls were answered. Now it’s easy to blame the staff but don’t – there aren’t enough of them, they are under pressure to limit call times (to the extent that they have been known to hang up if the call is “taking” too long – but think where that pressure is coming from), they are not trained well enough – client rings up on three separate occasions and get’s three different answers – you can’t rely on the advice from HMRC staff but perish the thought that you do and get it wrong. Tax enquiry, employer compliance review, tax investigation – you name it and it can and will happen

January 15, 2010 at 1:01 pm | Tax Advice | No comment

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Medical Professionals under Tax Investigation

Quick question for you:

When is a Tax Health Plan, nothing to do with medical cover?

When it’s the name of a tax investigation programme against medical professionals. Yes HMRC are back looking at NHS Trusts and medical professionals in general but this time round what they have done is some pilot work to ascertain what monies they could make from such an exercise and then based on this rather then roll it out nationwide, as they have done in the past, they have instead gone for the THP route. Basically, it means that any individual who thinks they may not have declared all their income from sources such as referrals and commissions have a limited window to make a full disclosure to HMRC. HMRC have issued information notices to various private medical providers such as BUPA, Sun Life etc to obtain details of any payments made – so is this the way forward, small local pilot exercises followed by “disclosure” opportunities – perhaps but in the case of the medical profession, HMRC have a favourite target of theirs, whether it be employment status, home to work travel or expenses generally, very interesting when you consider the whole question of MPs expenses and HMRC’s apparent non interest!

Keep reading for further updates

January 12, 2010 at 11:56 am | Tax Advice | No comment

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Welcome to our NEW website

Thanks to feedback from our existing clients we have relaunched our Employment Tax Website to provide more detailed information on

• HMRC Tax Investigations
• Car Scheme Solutions
• Employment Status Solutions
• Salary Sacrifice Schemes
• Termination payments

Feel free to leave a comment or drop us an email

November 9, 2009 at 3:52 pm | Tax Advice | No comment

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