|Tips by WAMS - Secrets and Pointers to avoid by Bill Stevenson
There are some common beliefs that will just get you in trouble
This page gives pointers to help individuals and others to avoid the full HMRC whip being wielded
on you and have been used by himself in enquiries from time to time.
Remember strategies are case specific so you need the experience or expertise of Bill to apply
them in your own case. Unless you become a client nothing on this page constitutes tax advice
Phone Bill for help if you think you need to make a disclosure
24/7 mobile - 07751 720 507
Avoid the tax enquiry and severest penalties -
So the tax expert in the pub said that if you have your own company or business you can
put expenses - including VAT through the business (reclaiming VAT if you are VAT
This is very dangerous if the expenses aren't wholly and exclusively for business purposes.
If you/your accountant do the work right at the end of the year it causes extra work (and time
means fees) as these items need to be disallowed in the accounts tax computations.
If however they are left in as deductions in arriving at the tax profits it can trigger enquiries
into the accounts and possibly an investigation.
The temptation to put private expenses through the business should be resisted
at all costs as it will cost you dear.
Also HMRC always suggest that this type of error falls into the severest category of civil
penalties - being deliberate and concealed warranting a minimum penalty of 50%
(and maximum 100%) if they catch you before you make a disclosure.
If you can get in first then you stand the chance of getting off with a min. 35% penalty.
So to get a straight 15% reduction in any potential penalty contact Bill on 07751720507 to
discuss making a voluntary disclosure.
Prompted or Unprompted Disclosure -
One of Bill's strategies (whether leading or giving advice to professionals) that is adopted
in taking on an investigation is to make a comprehensive review of the client's (individual,
company or partnership etc) case and identifying ALL material omissions;
understatements or failures with a view to bringing them out in the open before HMRC
become aware of issues beyond the current year.
This can reap worthwhile rewards including an immediate minimum penalty reduction of
15% for years outside the HMRC enquiry year.
It also helps to let HMRC know that you mean business and enables you to take the lead in
the enquiry as opposed to the usual of HMRC thinking that they are wearing the big
"tackety" boots on their foot and you were trying to keep matters secret and not helping.
Even better of course if you go forward before they catch you in the first place. Ring Bill on
07751720507 for a short free chat if you think you can benefit from Bill being your tax
investigation specialist. It works to save you money and don't be put off by the low fee rate
as compared with other investigation specialists.
Watch out the Kids are about -
If you have invested monies in your minor children's name watch out if the interest income
is more than £100 per annum as it will still be chargeable on yourself. HMRC know about
all UK bank accounts (and nowadays a lot of offshore or foreign accounts) where interest
has been credited and therefore if you leave any interest off your tax return you are just
inviting an HMRC tax enquiry into your personal tax return (and if you are a director or
shareholder or sole trader you can expect them to get intrusive and look into your business
for the evaded income you thought you had hidden in children's bank accounts
Remember Bill can only advise you on any particular strategy if you become a client. Also as
he has ethics (surprising for an Ex HMRC INspector we hear you say) he will not steal a client
from another professional. However he can easily assist any individual or professional
without becoming the day to day agent for a client so don't be afraid to contact Bill for an
initial free chat.
Tax doesn't have to be stressful BUT IT IS - Let Bill help phone 07751 720 507
Annual Seasonal or Xmas Gifts -
You can now buy your Xmas presents tax free through your limited company as long as the total
doesn't exceed a "reasonable" amount per person (WAMS thinks <£50 usually acceptable) and
£300 a year in total. Read more
Each Investigation has its own dangers and opportunities that require full and detailed considerations and advice. No
responsibility can be taken for any actions that the reader decides to take (or not take) after reading the text and articles
unless you engage with the company and Bill Stevenson on a proper fee paying client/tax adviser basis.
The personal views of Bill set out on this page do not constitute tax advice and are presented for enjoyment only by the
WAMS Tax Ltd - Bill Stevenson - 07751 720 507
Be very careful if two HMRC officers turn up with an authority to inspect your records WITHOUT
making a prior appointment and or going through your accountant.
This is a dangerous situation as clearly they consider that if they gave you warning of the visit
evidence would be "missing" showing that you had been guilty of carelessness or deliberate
conduct in relation to your tax evasion - or even worse that you have been guilty of tax fraud. They
might also just be trying to steal a march on your tax evasion by catching you unawares.
Do not try and deal with this yourself as HMRC officers tend to abuse their powers in this
situation - possibly "innocently" or through lack of knowledge to their own rules.
There are challenges in this for even the most experienced of investigation specialists so you need
to take advice as soon as possible from somebody that knows what to do. There are also ways of
dealing with matters that can level the playing field so contact Bill on 07751720507
HMRC will be sending out "Nudge Letters". These are template letters to the taxpayer (copy to
agent as well) where a mis-match is found between information held on their super computer and a
review of any return filed (or no return filed where it seems one should have been).
The letter doesn’t state exactly what is missing from the return, but it is designed to hopefully nudge
the taxpayer in to reviewing and correcting any incorrect return - or filing one where none has been
HMRC call these “one to many” letters.
This whole experiment is designed to save on staff having to open enquiries where there could be a
simple explanation for any seeming inconsistency. The letter is generated automatically by the
super- computer and it leaves the taxpayer and their agent (if they have one) to investigate the
issue and make any disclosure if required.
HMRC is currently comparing the 2018/19 SA tax returns with various bits of information that have
come from all over the world and is sending out nudge letters covering the following issues:
Deemed domicile - if you have been in the UK for
Statutory residence (They get details of your flights in and out of the country with dates and
times - if you've provided false documents or information you might need to consider COP9)
Discrepancies with employer reported pay and benefits
Disposal of residential property which was not the main home (might show tenants on voters list)
Investment income from financial institutions - (Not only in UK but worldwide - with penal penalties)
Deferred consideration on sale of private company shares
Income of persons with significant control of a company
It is important to note that a nudge letter is not a legal opening of an enquiry and therefore it needs
experienced and careful handling, Watch out for the certificate problem. This will probably mean that
your "tax investigation insurance" will not cover the fees that result from your actioning of the nudge
letter correction if needed. So you would be best to check that out first.
However the one thing you cannot do is act like the ostrich with its head in the sand and
ignore the letter. It does require action as HMRC may follow-up if the tax return is not
amended or no fresh one is submitted without contacting them to say there is nothing to declare..
There are more traps awaiting the inexperienced and naive or poorly advised and worst scenario
you could become a candidate for prosecution by HMRC if they consider your failure(s) or errors
amount to fraud or deliberate tax evasion.
In relation to the offshore sources and income that has not been disclosed please be aware that if
you should have acted in relation to the Requirement to Correct on or before September 2018 and
didn't then if the adviser set up a system where they contended that there was no UK tax Liability on
the offshore income you would need to get a second opinion on the structure and any contended
exemption in case there is "Tax non-compliance involving an offshore matter".
"Tax non-compliance" involves an offshore matter if the unpaid tax is charged on or by reference to:
income arising from a source in a territory outside the UK or
assets situated in a territory outside the UK or
activities carried on wholly or mainly in a territory outside the UK or
anything having effect as if it were income, assets or activities of a kind described above
Penalties in these situations can be up to 200% of the unpaid tax for the relevant years and are
unlikely to be below 150% (unless they are in relation to a country that has full reporting
transparency with the UK when they will be the minimum of 100%)
Bill can help in all situations (small local office enquiries through to serious and COP8 and/or COP9)
so get his experience on your side - Phone 07751720507 anytime.
Still trading and challenging HMRC