- HMRC acknowledge their responsibility for the payment of compensation
when they get it wrong. We anticipate that the final compensation
payment will grow to £10,000! Here
is HMRC's most recent letter on the matter. The Daily Mail
ran a two page article on this case which
you can read here. Martyn's comments about the case can be
found at the bottom of the article.
- HMRC capitulate entirely in respect of a £1million+
property development, in relation to a BVI company, and the case
is closed with no charge to tax.
- This was a foreign income case in respect of funds held on behalf
of a third party. HMRC abandoned the investigation without adjustment.
- HMRC's COP9 investigation closed without adjustment. The investigation
was into multiple companies set up to segregate multiple trading
below the vat threshold. Whilst HMRC has legislation to enable
it to combine trading entries it has had to acknowledge that doing
so does NOT constitute an offence!
- Incomplete records case. Faced with the prospect of facing us
at Tribunal, HMRC accepts that no adjustments are required for
the enquiry year and discharges assessments made for three further
- HMRC represented at Tribunal at Bedford Square London by their
Senior Advocate, ALL points in dispute were won by us!!
- Instructed at the very last moment we stepped in at High Court
presenting evidence that prevented an imminent bankruptcy.
- Yet again, (it is now pretty much routine) HMRC withdraws from
the challenge of our appeal, on this occasion an important CIS
issue relating to the employment of subcontractors! Wherever,
from the Redknapp £20 Million Trial through to "smaller"
cases, HMRC's bully boy tactics will NOT succeed!
- The case involved HMRC's attempt to disallow expenditure incurred
by a sole trader but paid by his Ltd Company. HMRC capitulated
completely and allowed all expenses claimed. We are seeking compensation
from HMRC for their conduct of the case.
- HMRC accept data supplied by us and withdraw totally from Tribunal
just 3 days before the planned hearing.
- Following our involvement, HMRC "decide not to pursue"
PAYE enquiry. It is closed with no duty payable and nil penalties.
- Review of Employer and Contractor Records. We were asked to
assist in this case when the previous agent had difficulty. HMRC
concluded their review with no adjustment and no further queries.
- HMRC had refused the 2006 - 2007 and 2007 - 2008 Overpayment
Relief Claims. Following our persistence and the threat of us
taking the matter to Tribunal if necessary, HMRC allowed almost
all the claims and refunded the money.
- COP 9 case. Original risk in excess of £1millon settled
at less than £200k.
- Civil Investigation of Fraud (CIF) case. Following our involvement,
HMRC conclude the case and put forward a settlement proposal which
the taxpayer happily agrees to.
- The Investigation related to information passed to HMRC in respect
of substantial cash sums found in a safety deposit box seized
in a bank raid by the Metropolitan Police in 2008. The investigation
has been concluded without adjustment in relation to cash discovered.
PAYE penalties levied concurrently, but separately, have been
cancelled, and settled under S54 TMA 1970.
- Tax Enquiry into the sources of funds and their distribution
throughout the family for years 2007/08 and 2008/09. A brilliant
result with the case being closed with no adjustment.
- Tribunal grants late appeal application in relation to the continuance
of a CIS Gross Payment dispute" meanwhile gross payment status
remains in place. READERS please NOTE however that the
Tribunal Service is becoming increasingly less tolerant of appeals
submitted late with no reasonable underlying reason! It seems
likely that Tribunal's stance will become less "generous"
to taxpayers who have not acted "reasonably" in relation
to their affairs! Our strongest advice to those with disputes
with HMRC is to process them as quickly and promptly as possible.
- Our client had been the subject a fraud which had cost him a
very substantial amount of money. and the criminal investigation
by the Metropolitan Police closed without prosecution. Following
intervention by us and the presentation of fresh evidence the
case has now been reopened by the Metropolitan Police. Additionally
we will be assisting the client ongoing to achieve recovery of
the defrauded funds!
- Check of Self Assessment Tax Return. HMRC accept our arguments
and issue a closure notice conceding they will make no amendment
to the tax return. A 100% successful outcome!
- The case was one where HMRC had raised penalties for late returns
in respect of nine consecutive periods totalling £27,000.
They refused in review to reduce these, but following application
to Tribunal by us they 'further reviewed' the case, cancelled
all but one of the penalties and reduced the one remaining from
£8,000 to £5,000. No reason was given for their decision.
- For the third time in just a couple of weeks, following notification
of our involvement in a relatively serious case, HMRC has chosen
to discontinue the case and close it down without adjustment
- The case involved backwards extrapolation by HMRC with which
we were content in principle. HMRC sought to almost double a previously
verbally agreed figure for this because of legal technicalities
which they sought to bring to bear. At Tribunal they were required
to accept the previously agreed figures on the basis that contracts
can be written, spoken of inferred, and a verbal agreement was
as binding on HMRC as a written one would have been.
- Excise Duty assessment on decanted imported fuel. Following
robust arguments by us, HMRC appealed the case and withdrew the
assessments without the need for us to approach Tribunal.
- A follow up to a recent successful closure of a case without
adjustment is that following forceful follow up action by us,
HMRC have agreed to pay compensation of some £15,000
to the client to represent reimbursement of all our fees and
an element of "personal" compensation for suffering
and distress. We are not satisfied with the amount of personal
compensation awarded and are pursuing a significantly more substantial
- Investigation into Self Assessment Tax Return for a Chinese
Restaurant. Case closed with only minor adjustments.
- HMRC have recently closed a second case "about which they
still have concerns, but which they do not propose to take further".
They have given no further explanation in respect of either and
the only logical conclusion is that they do not wish to further
argue with us.
- HMRC Investigation into the level of turnover declared.
Enquiry closed without adjustment. Here is the direct quote from
"Whilst I still have major concerns with regard to the
level of turnover declared I have taken
all available factors into consideration. On this basis I propose:
on this occasion only, and on
a without prejudice basis, to close the enquiry into the 2008/09
tax return, with no
- Business Renovation Allowance claim (CA545100 Onwards)
Claim agreed 100% following our intervention, previously disallowed.
- HMRC Duty "Due" on Decanted Fuel (Cross Channel
HMRC acknowledge its failure to comply with procedure required
by legislation and cancel assessment completely. Client describes
us as "saints".
- HMRC Code of Practice 9 (COP9) Investigation into sales suppression
HMRC Original risk £1M + interest and penalties,
Final Settlement £100k (including interest and penalties)
(By instalments over 5 years!) Client is ecstatic.
- HMRC Code of Practice 9 (COP9) Investigation Ltd Company
Liability claimed attributable to Director
£100k claimed; no evidence available to HMRC to substantiate
director's liability, nominal settlement of £10k proposed,
outcome pending but agreement expected.
- Following a three year campaign by HMRC against a 74 year old
lady hairdresser, who operated with just one stylist with an alleged
liability that would make her liable to Higher Rate Tax we were
approached. We arranged for the matter to be listed for appeal
at Tribunal and HMRC promptly declined to offer evidence, withdrew
from the appeal which was determined in the client's favour. We
are currently pursuing a claim for compensation of £25,000
via the client's MP we have also prepared a paper highlighting
faults within HMRC's Compliance System which the MP has passed
to Treasury Ministers where it is currently being considered.
- Following Mansworth v Jelly (2003) (Mansworth v Jelley 
EWCA Civ 1829) . The client relief claimed for Capital losses
incurred in respect of the disposal of shares acquired on the
exercise of share options in respect of 1997/98 - 1999/00. The
claim was disallowed on the 10 June 2010 basis of HMRC's "current
understanding" of the law following the Mansworth v Jelly
decision. We arranged for the matter to be listed for appeal at
Tribunal and HMRC promptly declined to offer evidence, withdrew
from the appeal which was determined in the client's favour.
- HMRC had refused to accept a late appeal against assessments
issued some 2 years previously because there were inadequate grounds.
The remit of the Tribunal in considering these matters if different
from the rigid guidelines by which HMRC is bound, and are focused
on the need to satisfy the interests of equity. We lodged an appeal
with than Tribunal Service on the grounds that the interests of
equity would not be served if the client was required to pay more
tax than was actually due because of the technicality of not having
appealed in time. The appeal was allowed and the clients affairs
have since been satisfactorily closed.
- Chapter 9 ITEPA Managed Service Companies. Following our intervention
HMRC has chosen not to pursue the Director personally for the
claimed liability and closed the file. We assume that they will
be taking this course of action in respect of all such cases.
- Incomplete records case. We were able to restrict the scope
of HMRC's investigation and put forward a robust defense for the
years in question despite very poor records. The case resulted
in a minimal tax liability which the taxpayer was very pleased
- Extra Statutory Concession (ESC) A19 "allows" HMRC
not to collect tax in certain cases. The arrears related to 2005/06
- 2008/09 and HMRC bases their demands on historical assessments.
We challenged the liability and as they were unable to demonstrate
it satisfactorily chose not to collect the alleged arrears. Client
wrote to us: "Many thanks for your help & assistance.
You have come up trumps & got an amazing result! At this end,
you have made two old people very happy."
- HMRC requires definitive evidence of situations rather than
apply the balance of probabilities. The client ran a garage business
and had employed his daughter part time to maintain his records.
There was no cash book evidence of wages paid and they had been
disallowed. We were able to demonstrate to Tribunal that the taxpayer
was illiterate and could not have maintained his own records,
that that his daughter had been a university accountancy student
at the time. This coupled with well presented evidence convinced
the Tribunal that the claim was genuine and the expenses were
- We disagreed with the methodology applied by HMRC in calculating
extrapolation. The Tribunal accepted arguments by us leading to
a substantial reduction in the extrapolated figures.
- Incapacity Benefit had been disallowed* after the claimant had
completed a questionnaire and been "examined" by a medical
board. No medical evidence from the individual's medical caperers
had been considered, or even obtained. The subject suffered from
Bi Polar Disorder a depressive condition just one symptom of which
is that her view of her circumstances varied from time to time,
from day to day or even minute by minute. We argued that it was
completely unacceptable for her condition to be assessed on evidence
presented by her alone, which, by definition, must be unreliable.
The Tribunal agreed and allowed the benefit without even the need
for attendance at the hearing.
- Substantial investigation into restaurant closed completely
on our terms, including acceptance of our issues relating to private
use adjustments which were a significant feature of this particular
- Cancellation of 2nd tier penalty for non completion of Return.
Footnote; Tax Chamber, Tribunal Service
It is difficult to write highly enough about the recently introduced
Tax Chamber to the Appeal Service, which bears absolutely no comparison
to the old Commissioners System which it replaced.
HMRC is essentially a predatory organisation charged with a responsibility
with generating tax. Conversely the Appeal Service is charged with
conducting a thorough assessment of a situation, and coming to an
objective conclusion which serves the interests of equity and is
based on the balance of probabilities.
The Service itself is free so the only costs incurred by the client
are our fees. Going to Tribunal can thus actually be less expensive,
more likely to be successful, and potentially speedier than a prolonged
exchange of correspondence with an entrenched tax inspector. Additionally
HMRC may well be more likely to back down when faced with a Tribunal
rather than the protests of an agent.
We offer a comprehensive service from case preparation through
to representation at the Tribunal Hearing. Hearings are informal
and very "user friendly".
*This case went before the Benefits Tribunal.