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Rising Stars On Taxman’s Radar

July 30th, 2015

HMRC now have a special unit examining the tax affairs of UK resident individuals whose income or wealth is increasing very rapidly: but who are not yet candidates to be dealt with by the High Net Worth Unit or the Affluence Compliance Team: the so-called tax “Rising Stars”.

HM Revenue and Customs’ Rising Star Unit was formed in 2012.  In 2012/13 it carried out 38 tax investigations, bringing in extra revenue (i.e. tax, interest and penalties) f £4.9 million.  In 2013/14 it carried out 51 tax enquiries with yield of £6.6.M – an average or around £130,000 per tax investigation.

The ranks of the taxman’s Rising Stars are likely to be heavily dominated by: young premiership footballers; popstars and other music industry figures (e.g. DJs); film and television actors (and similar celebrities); city traders and hedge fund managers; along with entrepreneurs of fast-growing businesses (e.g. computer gaming and social media businesses).

In addition to the Rising Stars team, HMRC has 2 other specialist tax compliance teams with extra dedicated resources to examine the tax affairs of the wealthy.  The “Affluent Compliance Team” targets the 30,000 taxpayers with annual income over £150,000 or wealth between £2.5M- £20M.  The “High Net Worth Unit” targets the richest 6,200 individuals: typically those with wealth over £20 million.

What does it mean for me?
If you’re a young person with rapidly growing income or wealth you are increasingly likely to be targeted by a specialist investigation unit.  Also, if you are a colleague of anyone who has already been investigated by that unit (or say you share the same agent or tax or financial adviser) then you are also more likely appear on HMRC’s radar.  Of course, this doesn’t mean that you have done anything wrong.  But HMRC are extremely intrusive in their enquiries, and will be putting a lot of skilled effort into probing your financial affairs.  Unless the enquiry is properly managed on your behalf you are likely to have a lot of disruption: and potentially a very large tax bill to pay at the end of it.

How can Lynam Tax Enquiry Experts help me?
The tax investigation specialists at Lynam Tax have a massive amount of experience in dealing with tax enquiries by HMRC’s specialist units.  We are currently assisting a number of premiership footballers with their tax enquiries.  The taxman is using highly skilled, dedicated specialists to look at your affairs.  You need to be represented by equally experienced and highly skilled tax advisers.
If you, or one of your clients, is undergoing a tax enquiry do not hesitate to call for a free initial consultation:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

How do I prepare for a Tax Tribunal hearing?

July 28th, 2015

Only a very small number of tax disputes end up at the Tax Tribunal. The majority of tax enquiries and tax investigations end up with a negotiated settlement with HMRC.  Sometimes however it is not possible to reach an agreement with the taxman. If you reach an impasse with the Tax Inspector dealing with your case you can ask for an Internal Statutory Review. This can be an extremely effective way of bringing your case to a conclusion. However, if the HMRC Internal Reviewer also finds against you, then your only alternatives are to concede or to appeal to the independent First Tier Tribunal (a.k.a. the Tax Tribunal).

HMRC use specialist appeal teams to prepare for and appear at the Tax Tribunal hearings. However, if you decide to take the case yourself, or choose to be represented by your normal accountant, then the following tips will be useful to help you in your preparation.

1  Agree with HMRC in advance:

  • A statement of undisputed facts;
  • The documents to be presented;
  • Settlement of any minor points; by prior negotiation.

2  Prepare:

  • Know your case (and HMRC’s) thoroughly;
  • Keep your brief simple – avoiding excessive detail;
  • Identify your 3 or 4 strongest points;
  • Include each of these points at the:
    opening;
    examination; and
    summing up.
  • Prepare cross referenced bundles of evidence;
  • Prepare any witnesses thoroughly;
  • Anticipate counter arguments;
  • Practice your presentation.

3  Presentation

  • Appear calm and in control:  take your time;
  • Stick to your brief;
  • Watch the Tribunal judges, ensure that they understand;
  • Cross-examine HMRC’s witnesses;
  • Generally, only ask witnesses questions where you already know the answer;
  • Summing up:
    keep it simple;
    emphasise your strengths;
    highlight HMRC’s weaknesses.

How can Lynam Tax Dispute Experts help me?

Lynam Tax Dispute Experts
have a wealth of experience in dealing with contentious tax disputes, and with handling the appeals process. HMRC use specialist teams for appeals. You may well be at a major disadvantage if you do not use a specialist for your appeal case. Lynam Tax specialists can help you prepare for the hearing, and also advocate for you in front of the Tribunal.

If you are considering taking your case to appeal then why not talk to Lynam Tax experts today: for an initially free and objective discussion:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

VAT Fiddling Carpet Cleaner Convicted and Canned

July 27th, 2015

A self-employed carpet and upholstery cleaner from Perth in Scotland has been sentenced to 12 months imprisonment for attempting a VAT repayment fraud worth £45,000.

Kevin James Brown, aged 28 of Scone in Perth, had a turnover of £12,000 between July 2011 and July 2013.  On his VAT returns for that period he claimed to have bought supplies costing £258,867; so as to make fraudulent VAT repayment claims.   He had been paid £35,000 by HMRC before tax inspectors challenged him.

Brown pleaded guilty to being “knowingly concerned in the fraudulent evasion of Value Added Tax” of £34,436.08, and was sentenced to 12 months in prison.

How Could Lynam Tax Enquiry Experts Help Me?
We have decades of extensive practical experience in managing tax disclosures and tax fraud investigations.  If you have irregularities in your tax affairs we can advise you on your best course of action.  If appropriate, we will help you with any disclosure.  If you are already under criminal investigation we can assist in the preparation of the defence case.  We can help get the best possible outcome for you, your business and your family.

*For a free, private, no obligation consultation, call


Paul Lynam: 0845 643 9997


Andrew Nutbrown: 07718 778710

Tax Dodging Car Dealer Jailed

July 23rd, 2015

A 2nd car dealer with a multi-million pound turnover who operated off the grid for 14 years when it came to his tax affairs has been jailed for tax fraud after HMRC finally caught up with him.

Ambrose Smith, aged 71 of Norton in Gloucestershire, was not registered for Income Tax, VAT or National Insurance – despite selling millions of pounds worth of cars over a period of at least 14 years. He was a trade middleman: buying vehicles from dealers and auction sites and then selling to other dealers.  HM Revenue and Customs tax investigators found that millions of pounds had passed through his bank accounts; including an offshore bank account in the Channel Islands.  Smith did not keep any formal business records, but the tax inspectors discovered handwritten diaries (in a transporter on his driveway) recording the car sales. The tax officers also got copies of sales invoices from the car dealerships he had traded with.

Smith was charged with 2 counts of “cheating the public revenue”. He pleaded guilty and was sentenced to 4 years and 8 months imprisonment. The amount of the tax fraud was agreed at £789,809 from 1997-2011.  Smith had invested his gains in property in Gloucestershire. HMRC have started proceeds to recover the proceeds of these tax crimes.

How Could Lynam Tax Enquiry Experts Help Me?
We have decades of extensive practical experience in managing tax disclosures and tax fraud investigations.  If you have irregularities in your tax affairs we can advise you on your best course of action.  If appropriate, we will help you with any disclosure.  If you are already under criminal investigation we can assist in the preparation of the defence case.  We can help get the best possible outcome for you, your business and your family.

*For a free, private, no obligation consultation, call


Paul Lynam: 0845 643 9997


Andrew Nutbrown: 07718 778710

What are the Time Limits for Claims?

July 22nd, 2015

Rules introduced from 1 April 2010 changed and reduced the deadlines for taxpayers to make claims for tax reliefs.  Generally the time limit for direct taxes was reduced from five years and 10 months (six years for companies) to four years.  For VAT, the time limits increased from three to four years.

For individuals who are not in Self Assessment the new time limits took effect from 1 April 2012 not 2010.  This includes people who pay tax via PAYE or whose income is below the tax threshold.  Time limits now run from the end of the relevant tax year or taxable period (instead of being linked to filing dates).

For Income Tax and CGT some elections and claims relating to Self Assessment tax returns still have to be submitted by either one year or five years after the 31 January statutory filing deadline.  The one year claim period did not change.  The old five years and 10 months limit did change to four years for all claims submitted after 31 March 2010.

For Corporation Tax the old six years time limit changed to four years from the end of the Accounting Period, with effect from 1 April 2010.  This includes Error or Mistake claims.

The new deadlines

Individuals:

2011/12             5 April 2016

2012/13             5 April 2017

Companies:

APE:  1 April 2012       1 April 2016

APE:  1 April 2013        1 April 2017

Lynam Tax partners have a vast amount of practical experience in making successful claims, and in handling cases where HMRC dispute the claim. We can advise you on the best course of action, in order to obtain the optimum outcome.

*For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997

or Andrew Nutbrown on 07718 778710

Big Increase in Raids by the Taxmen

July 9th, 2015

The number of “raids” (i.e. uninvited search and seize operations), carried out by HM Customs and Revenue – aimed at securing evidence of criminal prosecutions – increased significantly in the year 2014/15, according to a reports in Taxation magazine 2 July 2015.

In the last year HMRC tax investigators carried out 593 raids, compared to only 196 in 2010/11.

HMRC raids are coordinated – with dozens and sometimes hundreds of HMRC officers arriving at private homes and business premises at the same time (typically 7am), in order to catch the occupiers unaware; serve the warrant; search for evidence of tax evasion; seize that evidence; log it; bag it; and remove.  Frequently the suspected tax fraudsters are arrested on the same day, and taken to a police station for questioning.  If the tax inspectors find sufficient evidence during the search, they may charge the suspect that day also.

Raids can be traumatic for the suspect, their families and their staff; and can be highly disruptive to business operations– particularly when computers are seized.  HMRC can only carry out an uninvited search if it has a warrant signed by a judge.  But armed with a valid search warrant the tax inspectors can enter premises “by force if necessary”.   Obstructing an authorised search is a criminal offence.  HMRC are usually accompanied by uniformed police officers; often causing intrigued gossip amongst the neighbours.

The increase in search and seize operations is not surprising, given HMRC’s stated aim of increasing the number of tax prosecutions fivefold.

How Could Lynam Tax Enquiry Experts Help Me?
We have decades of extensive practical experience in managing tax disclosures and tax fraud investigations.  If you have irregularities in your tax affairs we can advise you on your best course of action.  If appropriate, we will help you with any disclosure.  If you are already under criminal investigation we can assist in the preparation of the defence case.  We can help get the best possible outcome for you, your business and your family.

*For a free, private, no obligation consultation, call


Paul Lynam: 0845 643 9997


Andrew Nutbrown: 07718 778710

Tax Fiddling Belfast Builder Banged Up

July 2nd, 2015

A builder from Belfast was sent to prison for tax fraud this week after HM Revenue and Customs’ tax inspectors found he had not properly operated the Construction Industry Scheme and was fiddling his VAT payments.

Sean Joseph Anthony Dornan, aged 25, was registered as a sole trader.  He claimed to have no sub-contractors. The tax investigators realised his workload was far too much for one man and that he must have been employing other workers.  But instead of registering with the taxman as a contractor and deducting tax from their pay he simply kept the tax that was due. On top of that he failed to pay any VAT: fiddling the HMRC out of £175,381.  In court he pleaded guilty to being “knowingly concerned in the fraudulent evasion of VAT” and “cheating the public revenue”.

HMRC Assistant Director, Criminal Investigation, said: “We are investing more time and effort than ever into tracking down those who attempt to rip off the tax system and anyone deliberately choosing to evade their responsibilities should expect not only a heavy fine, but possibly a criminal prosecution as well.”

Dornan was sentenced to 21 months imprisonment. He will serve half of the term in prison before being released on licence.

How can Lynam Tax Enquiry Experts help me?
If you are undergoing a tax investigation or a compliance check then specialist help from Lynam Tax Enquiry Experts could save your blushes and your business.  Plus, our massive experience will almost certainly save you tax and penalties as well.

*For a free, confidential chat about your tax affairs, don’t delay, call Paul Lynam now on 0845 643 9997

or Andrew Nutbrown on 07718 778710

Snitches Get Record Payments From UK Taxman

June 18th, 2015

The amount paid to informants by HM Revenue and Customs in the year to 31 March 2015 was a Record £605,000.  That’s a full 50% up on the amount paid out in the previous year, according to a report by Calum Fuller in Accountancy Age this week.

HMRC were keen to publicise the fact that the majority of their informants do not get paid anything.  Much of the information passed on to HMRC by informants is of negligible value, and is often incorrect or malicious.

HMRC were keen to assert: “Cash rewards are discretionary and based on what is brought in a direct result of the information provided”.  It has to be assumed that the recipients of the £605,000 had all passed on specific and valuable intelligence about tax evasion.

It is commonly said by tax inspectors that the most valuable sources of information are: disgruntled ex-employees, mistresses, and spurned wives!

How can Lynam Tax Enquiry Experts help me?
If you are undergoing a tax investigation or a compliance check then specialist help from Lynam Tax Enquiry Experts could save your blushes and your business.  Plus, our massive experience will almost certainly save you tax and penalties as well.

*For a free, confidential chat about your tax affairs, don’t delay, call Paul Lynam now on 0845 643 9997

or Andrew Nutbrown on 07718 778710

PAYE Thieving Nursery Owner Goes To Jail

June 17th, 2015

A co-owner of a chain of children’s nurseries has been sentenced to five and a half years in prison for tax fraud, after stealing £950,000 of PAYE tax deducted from his employees’ salaries.

Hampshire based Michael Everard Scott, aged 63, deducted Income Tax and National Insurance Contributions from his staff’s pay-packets: but did not pay it over to HM Revenue & Customs.  He also failed to contribute the connected employers’ NIC.  The taxman began a criminal tax investigation when ex-employees queried gaps in their Tax and NI records. The tax investigators proved that Scott (who also goes by the alias Stuart Wilson) had cheated the Exchequer and some 180 staff – between April 2007 and November 2011.

According to HMRC, Scott owns a vast property portfolio and a private aircraft.

Scott was charged with “offences contrary to section 1 of the Fraud Act 2006”, and found guilty by a jury, and then jailed for five and a half years.  On sentencing His Honour Judge Henry said: “This is a cheat of your fellow citizens, but the group you put at substantial risk is your staff. Your actions put in jeopardy their rights and entitlements.” His ex-wife was also originally arrested and charged too, but she was acquitted during the trial.

HMRC is assisting the victims, and has started confiscation action to recover the proceeds of these crimes.

How Could Lynam Tax Enquiry Experts Help Me?
We have decades of extensive practical experience in managing tax disclosures and tax fraud investigations.  If you have irregularities in your tax affairs we can advise you on your best course of action.  If appropriate, we will help you with any disclosure.  If you are already under criminal investigation we can assist in the preparation of the defence case.  We can help get the best possible outcome for you, your business and your family.

*For a free, private, no obligation consultation, call


Paul Lynam: 0845 643 9997


Andrew Nutbrown: 07718 778710

What is the process for Internal Reviews?

June 10th, 2015

Where taxpayers and the taxman cannot resolve a dispute by negotiation, a less formal and cheaper alternative to going to the independent Tax Tribunal (or a handy additional route of appeal) is HMRC’s Internal Review process, (properly known as a Statutory Review).  Taxpayers have a statutory right to an Internal Review if they want one, but they are not compulsory.  A Statutory Review is available when HMRC issues an appealable notice of assessment or a Decision.

Direct tax appeals
Appeals in direct tax cases are made first to HMRC rather than the Tax Tribunal. A Statutory Review can only be triggered when an appeal has been made against an appealable decision made by HMRC and when:

  • the Tribunal the has not yet been notified of the appeal;
  • HMRC can offer the taxpayer a Review.

Only the taxpayer can notify the Tribunal of an appeal, HMRC cannot.  So offering a Statutory Review is the only way HMRC can progress matters when negotiations are at stalemate.

Where the taxpayer asks for a Statutory Review the taxman has to issue a Decision Letter within 30 days of the request. The Decision Letter must set out HMRC’s views, and state the tax they want. That letter triggers the start of the formal Statutory Review period.

Where the taxman offers the Review, the taxpayer has 30 days to either:

  • accept the offer of Statutory Review; or
  • appeal against the Decision to HMRC and then notify the Tax Tribunal of the appeal;
  • If the taxpayer does nothing then the matter is treated as finally settled on the basis set out by HMRC, unless the taxman accepts a late application.

The normal timescale for a Statutory Review is set at 45 days, but a different timeframe can be agreed between HMRC and the taxpayer.

Once HMRC has told the taxpayer its Review conclusion, the taxpayer can:

  • accept the conclusion;
  • or appeal to the Tax Tribunal within 30 days of the Review Conclusion Letter;
  • After 30 days an un-appealed Statutory Review Decision is treated as being agreed, unless the Tribunal accepts a late appeal;
  • Where HMRC do not complete the Statutory Review within the agreed period, then the HMRC’s Decision Letter is automatically upheld.  HMRC must notify the taxpayer of this as soon as possible. The taxpayer then has 30 days to appeal to the Tribunal;
  • The taxpayer can also notify an appeal directly to the Tax Tribunal: at any time between the original appeal and accepting the offer of a Review; or at any time between appealing and receiving HMRC’s latest view where a Review was requested; or within 30 days of either the Review Conclusion Letter, or the letter notifying that the Review has not been completed within the Review period.

Indirect taxes

For indirect taxes the Review must be offered at the same time as the Appealable Decision is notified to the taxpayer. The taxpayer can then accept the offer of the Review or make an appeal directly to the Tax Tribunal, within 30 days of the notification letter. If the taxpayer is not satisfied with the outcome of the Statutory Review an appeal can then be made, again directly, to the Tribunal.

How Reviews are conducted

Usually the Review Officer will be outside the direct line management chain of the original case worker or Decision-maker.  The Review Officer’s role is to check if the Decision is in line with the law and HMRC’s technical guidance, policies, and custom and practice. The Review officer has also to consider whether the case is one which HMRC would want to take to the Tax Tribunal (e.g. an important point of principle).  The taxpayer can submit extra information to the Review Officer, although if that is substantial the Review Officer is likely to refer it back to the case worker or Decision-maker whilst asking the taxpayer to agree to an extended Review period.

If you are undergoing a tax investigation or a compliance check then specialist help from Lynam Tax Enquiry Experts could save your blushes and your business.  Plus, our massive experience will almost certainly save you tax and penalties as well.

*For a free, confidential chat about your tax affairs, don’t delay, call Paul Lynam now on 0845 643 9997

or Andrew Nutbrown: 07718 778710

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