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Can Tax Avoidance be a Crime?

October 20th, 2014

There has been a long time debate about the difference between tax evasion (which is a crime) and Tax Avoidance (which generally is not).

The taxman gave his view very neatly back in 1997 when the Chief Inspector at the time (John Gribbon) said:
“If an ‘avoidance’ scheme relies on misrepresentation, deception and concealment of the full facts, then avoidance is a misnomer; the scheme would be more accurately described as fraud, and would fall to be dealt with as such.  Where fraud is involved, it cannot be re-characterised as avoidance by cloaking the behaviour with artificial structures, contrived transactions and esoteric arguments as to how the tax law should be applied to these structures and transactions.  Fraud is fraud, common cheat is common cheat and the application of tax law to ‘pretend’ situations is something of an irrelevance.”

Although HMRC could theoretically prosecute all tax fraud (including say a taxi driver putting a fiver in his back pocket) in fact they prefer to “take the money” and settle cases by way of a so-called civil settlement, rather than launching a criminal prosecution.  The larger of these cases are dealt with under the Contractual Disclosure Facility (Code of Practice 9) procedures and guarantee non-prosecution, in return for full disclosure.

Lynam Tax Investigation Experts have a vast amount of practical experience in managing serious tax fraud investigations.  If you are worried about a tax investigation we can advise you on the best course of action.  If appropriate, we can help you manage any necessary disclosures.  If you are facing criminal charges we can help you obtain first class legal representation, in order to obtain the optimum outcome for you, your business and your family.

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

or Andrew Nutbrown on:  07718 778710

Can I get Cash back from the tax man? Overpayment Relief Claims

October 19th, 2014

Overpayment Relief Claims (ORC) enables both companies and individuals to recover tax from the Taxman where an error or mistake has been made in their tax return.

Claims must be made within 4 years of the end of the relevant tax year or accounting period, e.g. claims for the Income tax year 2010/11 must be made by 5 April 2015; claims for a company Accounting Period ended 31 March 2011 would have to be made by 30 March 2015.

Overpayment Relief is not due where the Overpayment Relief arose as a result of “a practice generally prevailing at that time.”

The approach to HMRC should be made appropriately, minimising the potential for a full enquiry, to secure the repayment as quickly and efficiently as possible.

Lynam Tax Dispute Experts have decades of experience in sorting out contentious issues with the taxman.

*For a free and totally confidential initial discussion call Paul Lynam now on:  0845 643 9997

or Andrew Nutbrown on:  07718 778710

Psychological Warfare on Tax Evaders

October 16th, 2014

The taxman is now using behavioural psychologists to draft letters to errant taxpayers: in order to “guilt-trip” them into sorting out their tax affairs.

The Coalition’s Chief Secretary to the Treasury (Danny Alexander) speaking at his party’s conference threatened: “Tax dodgers beware – we know where you live, we know how much you owe, and now we know how you think. Your behaviour is unacceptable, and we are coming for our money”.

Where people have tax arrears, HMRC frequently send out so-called “nudge” letters to encourage them to pay up: e.g. 5,000 such letters were sent to UK residents holding Swiss accounts earlier this year.

Apparently HMRC’s team of so-called “behavioural economists” to advise them on the psychology of tax compliance and to subtly refine the wording of the “nudge” letters.

HMRC have adopted a well-known psychological concept:  “social proof”.  In his book “Influence, Science and Practice”, the renowned psychologist Robert Cialdini says: “The principle of social proof states that we view a behaviour as correct in a given situation to the degree that we see others performing it”.   The social-proofed letters emphasise the behaviour of the “great majority”:  using phrases like “most people with a debt like yours have now paid it”.

Cialdini also emphasises the importance of “similarity”, saying “the principle of social proof operates most powerfully when we are observing the behaviour of people just like us”.  HMRC have picked up on this so that often local comparisons are used, such as “9 out of 10 people in [your town] pay their tax on time”.

The revised letters also seem, at first glance, to appeal to people’s moral and social obligations.  For instance, HMRC say that taxpayers who owed more than £30,000 were 20% more likely to respond when letters claimed that the taxes are used to “essential” public services.  In fact, these letters also rely on a well-known psychological trick.  Robert Cialdini points out that when we ask someone to perform an action for us “we will be more successful if we provide a reason”: the “because” effect.  Effectively HMRC are saying people should pay up because the money is used for spending!

It seems to be working as the tax authority claim that the changes in wording have already helped it collect £210 million extra tax each year.

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

Greater Yield from Residence and Domicile Tax Investigations

October 7th, 2014

In the last tax HMRC’s yield from investigations into residence and domicile issues went up 27% from the previous year to £154 million, according to a report by Adam Palin in the Financial Times last week.

Many of these tax enquiries are looking at the affairs of so-called “inbounds”, that is people who have recently arrived in the UK, often on short-term or dual contracts whilst working for large multinationals, frequently in the financial services sector.   The taxman attributed the extra yield (i.e. of tax, interest and penalties) to “effective investigation of residence, and domicile status of the individuals seconded to the UK.”

Despite new guidelines from the tax authority in its booklet HMRC6, a complete overhaul of the rules relating to domicile from 2008 onwards, and the introduction of the Statutory Residence Test for the tax year 2014/15 onwards, the issues relating to non-doms and the issues surrounding UK tax residence and non-residence remain complex and confusing: to the extent that not only the typical layman, but even the majority of accountants and tax advisers who do not do not specialise in this area, frequently find them quite baffling.  It is not surprising therefore that many mistakes are made, and that the tax investigators find this a lucrative hunting ground.

Lynam Tax enquiry experts have helped many non-domiciled individuals save large sums by careful analysis of their affairs and the correct application of complex legal principles: which a large number of tax inspectors seem to misunderstand.  Also, dealing with a Tax Residence enquiry or a domicile or remittance dispute requires specialist knowledge, deep experience and a proven methodology in getting investigations and disputes resolved.

If you need more information about this complex issue then phone today for a free, confidential, no obligation discussion.  Call:

Paul Lynam : 0845 643 9997  or

Andrew Nutbrown : 0771 877 8710

What are the Adjudicator and Ombudsman?

September 25th, 2014

The Adjudicator and The Ombudsman are there to help taxpayers who are unhappy with how the taxman is treating them.  They can investigate complaints and award compensation.

The Adjudicator’s role is the ‘impartial referee’ in complaints about HMRC.  Although separate from HM Revenue & Customs it does rely on HMRC for staff.

The Adjudicator will normally only get involved after HMRC have had the opportunity to sort out the problem using its internal complaints procedures.  But exceptionally they may help you sooner, e.g. if delay could cause you or your business irreparable damage.

The Adjudicator can deal with complaints regarding HMRC administration.  This includes excessive delays in processing tax claims, errors made and discourtesy to taxpayers.  The Adjudicator does not deal with: technical tax disputes (which can be dealt with by the Tax Tribunal); complaints that have already been investigated by the Parliamentary Ombudsman; or matters relating to a criminal prosecution, during the course of legal proceedings.

The Adjudicator can recommend payment of financial redress including:  repayment/waiving of tax; reimbursing professional fees; consolatory payments.

The Ombudsman considers complaints about poor service by government departments, including HM Revenue and Customs.  E.g. if there has been: avoidable delay; failure to give appropriate advice; failure to follow proper procedures.  The Ombudsman cannot investigate complaints about tax policy or tax legislation. The Ombudsman has wider scope to look at HMRC’s actions than the Adjudicator and can recommend larger compensation than the taxman’s guidelines suggest.

Complaints can go to the Adjudicator directly but complaints to the Ombudsman have to be channelled through an MP.  For both, you must have usually have exhausted the taxman’s own complaints procedure first.  Itself an exhausting process.  NB. The adjudicator cannot look at complaints which the Ombudsman has already dealt with; whereas the Ombudsman will expect complaints to have been through the Adjudicator’s office first.

Pursuing a formal complaint can be a soul destroying task but a very large percentage of complaints are upheld, and it can lead to worthwhile compensation payments.

What does it mean for me?
If you have a dispute with the taxman and you feel they have behaved improperly or unfairly then in some cases it can be worth making a formal complaint.  Where worthwhile sums are involved it’s always sensible to engage skilled and experienced tax advisers to prepare your case and fight your corner.

Lynam Tax Enquiry Experts have helped many clients who were aggrieved with how the taxman was dealing with them – and we have frequently been able to bring about a positive outcome; including obtaining significant tax repayments, reimbursement of our fees, and consolatory payments for our clients’ distress.

For expert help:  call today for a confidential, discreet discussion with our experienced Tax Dispute Specialists.

Call Paul Lynam now on 0845 643 9997

Or Andrew Nutbrown on 07718 778710

Adjudicator warns HMRC about complacency

September 24th, 2014

The Adjudicator’s Office has recently released its report for the year ended March 2014.  It doesn’t make happy reading for HMRC.

The Adjudicator’s role is to investigate complaints from individuals and businesses who are unhappy about the way that HM Revenue & Customs had been handling their complaint previously.  The Adjudicator can look at complaints about: mistakes; unreasonable delays; poor and misleading advice; inappropriate HMRC staff behaviour; and the lack of the use of discretion.

Anyone questioning whether it is worth making a complaint to the Adjudicator should note that 90% of complaints about HMRC were upheld by the Adjudicator; in whole or in part.  Additionally, the Adjudicator “successfully mediated” outcomes for 55% of the complaints they received about HMRC.  This would suggest that Adjudicator persuaded HMRC uphold the complaint (at least in part) and possibly pay compensation, without the Adjudicator’s Office making a formal ruling.  The Adjudicator recommended that HMRC give up tax of £1,900,000; reimburse costs of £181,000; and pay compensation for “distress and worry” of £247,000.

Once again, the adjudicator’s report was highly critical of how the tax office handles complaints itself.  Bearing in mind that all of the complaints dealt with by the Adjudicator should already have been through HMRC’s own internal convoluted complaints process, one would expect that the number of successful complaints then brought before the Adjudicator would be minimal; rather than quite the opposite.  The Adjudicator said that HMRC had “no room for complacency“.  She complained that the tax authority often displayed “no sense of urgency when making decisions“, and often did “not appreciate the impact” of its actions.  On a more positive note, she stated that there had been a recent reduction in HMRC complaints, partly due to HMRC taking the matter will seriously and instigating “a nationwide complaints transformation programme“.

Pursuing a formal complaint can be a soul destroying task – but a very large percentage of complaints are upheld, and it can lead to worthwhile compensation payments.
Lynam Tax Dispute Experts have decades of experience in sorting out contentious issues with the taxman. If you need help in dealing with HMRC or are considering making a complaint then: for a free and totally confidential discussion call:

Paul Lynam:  0845 643 9997
or
Andrew Nutbrown:  07718 778710

Belfast Builder Guilty of VAT fraud

September 23rd, 2014

A Belfast-based builder billed VAT but bunged it in his back pocket instead of paying it over to the taxman.  But despite being found guilty of tax fraud this week he avoided a custodial sentence.

John McDowell, aged 56, ran Aspect Construction.  He charged clients the correct amount of VAT for construction work he carried out, but kept £73,000 of it – instead of paying it over to HM Revenue & Customs.  He was found guilty of tax fraud and was sentenced to 18 months – suspended for two years – at Laganside Court.

How Could Lynam Tax Enquiry Experts Help Me?
Lynam Tax Enquiry Experts have a vast amount of practical experience in managing serious tax fraud investigations.  If you are worried about a tax enquiry we can advise you on the best course of action.  If appropriate, we can help you manage any necessary disclosures.  If you are facing criminal charges we can help you obtain first class legal representation, in order to obtain the optimum 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

HMRC Taskforce Targets “Fraudulent VAT Repayments” in Midlands

September 22nd, 2014

The latest Tax Taskforce was announced this week, aimed at tackling so-called “fraudulent VAT repayment” claims across the Midlands: with a particular focus on Nottingham, Birmingham, Coventry, Stoke and Wolverhampton – and the aim of netting £7 million in extra tax.

This taskforce is expected to recover nearly £7 million across the Midlands.  Similar “VAT repayment” taskforces have operated across the UK since 2012, and the amount of VAT recovered from this issue alone now stands at over £22 million, according to HMRC.

The Taskforce initiative was launched by HMRC in 2012, as a new “quick win” way to tackle non-tax compliance. Taskforces are specialist teams bringing together various HMRC compliance and enforcement teams, carrying out intensive bursts of tax compliance activity in specific trade sectors and locations across the UK: focussing on areas that the taxmen see as particularly “high risk” in terms of evaded tax.  Different trade sectors and geographical areas are announced from time to time. The taskforces target taxpayers in that business sector or location for a period of 3-9 months; typically focusing on groups of up to 300 taxpayers. The taskforces then move on to other business sectors or areas.

How can Lynam Tax Taskforce Experts help me?
HMRC taskforces are specialists in their field.  If you are contacted by a tax taskforce then you may need specialist help on your side.  Our experts have enormous experience in all aspects of tax investigations.  We can help relieve your worry, and save you tax and penalties, as well as keeping you out of prison.

*For a free, confidential chat about your tax affairs, don’t delay, call now:

Paul Lynam:  0845 643 9997
or
Andrew Nutbrown:  07718 778710

“Incredibly Dishonest” Derbyshire Publican Walks Free

September 21st, 2014

A Derbyshire pub operator found guilty of tax fraud was sentenced this week, and described as “incredibly dishonest… a chancer, a conman and not to be trusted” by the judge – who then gave him a suspended sentence and some community work to do.

William Ludlam, aged 27, ran MI Leisure Limited; operating pubs and restaurants in Derby, Ashbourne, Chesterfield, Burton-on-Trent and Sheffield.  He falsely claimed that his company was incurring costs refurbishing properties, and he also under-stated the business turnover: in order to evade VAT.  When challenged by HM Revenue & Customs tax investigators he created false invoice and fake paperwork.  In 2010 and 2011 he made false VAT repayment claims of £130,287.  He also made similar false claims (of £30,000) for his motor accessories business.

Ludlam was given a 1 year jail sentence, which has been suspended for 18 months; he was debarred from being a company director for 5 years; and has to perform 250 hours of community work.  HMRC have commenced proceedings under the Proceeds of Crime Act in order to confiscate Ludlam’s “criminal profits or assets”.

How Could Lynam Tax Enquiry Experts Help Me?
Lynam Tax Enquiry Experts have a vast amount of practical experience in managing serious tax fraud investigations.  If you are worried about a tax enquiry we can advise you on the best course of action.  If appropriate, we can help you manage any necessary disclosures.  If you are facing criminal charges we can help you obtain first class legal representation, in order to obtain the optimum 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

Taskforce Latest: Property Tax Dodgers

September 18th, 2014

HMRC announced the creation of their most recent taskforce last week: aimed at catching people in the South West of England and South Wales who have sold or rented out properties without declaring the Capital Gains or the rental income.

The taxman claims to have recovered over £12 million as a result of similar property tax taskforces in London, south east England and Yorkshire: “using intelligence from the Valuation Office Agency”; and to currently have over 80 cases under criminal investigation. This latest taskforce is expected to recover £5 million.

HM Revenue & Customs has instigated 70 taskforces since 2011 and is planning 30 more for the current tax year.

How can Lynam Tax experts help me?
If you are in a sector targeted by an HMRC campaign you may need assistance with your disclosure. In any event, if you have any irregularities in your tax affairs you could benefit from our expert help. Lynam Tax Enquiry Experts have enormous experience of tax investigations and tax disclosures.

For a confidential and free initial discussion phone the experts now:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 0771 877 8710

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