Inland revenue (IR) interest in stoozing?

Bordera

Again without knowing (or wishing to know) the finer details of SS's circumstances it is difficult to comment but I certainly agree with schiff's analysis of the situation, in my case from the other side of the fence.

What worries me, and has worried me for some time, is the possible impact of the 2003 anti-money laundering legislation on stoozing. Basically, the movement of unusually large sums of money around the financial system will trigger the interest of the banks, HM Revenue and Customs and ulitmately the police.

THIS HM Revenue and Customs publication may help explain their approach.

THIS web page explains what the legal obligations of the financial institutions in relation to money laundering.

Jugding from the type of questions asked, my guess would be that Mr SS has triggered some anti-money laundering alarms. As the paperwork is available and the transactions are fully traceable and legitimate all should be well.

Re keeping your paperwork? My advise would be to keep it at least for as long as your bank does. If you want to know how long that is, ask them.

I should add that it is pointless getting upset with financial institutions for reporting suspicious transactions. They are ALL legally obliged to do so. The penalty for failing to do so can be a prison sentence... for the poor soul who didn't report a relevant transaction!

YorkshireBoy

Bordera wrote:

Basically, the movement of unusually large sums of money around the financial system will trigger the interest of the banks, HM Revenue and Customs and ulitmately the police.

I don't think it's necessarily 'large sums' (a good stooze would be £10-20K) that will attract the attention of the relevent bodies - after all, the money could have come from a redundancy settlement or a lump sum pension payment. More likely it will be the annual sum or frequency thresholds that trigger the alarms, I would have thought?

It does beg the question though; why wasn't the account holder asked to explain the transactions to his bank, before Revenue & Customs were alerted and enquiries instigated - if indeed that was the sequence of events?

sarahlouise210

YorkshireBoy wrote:

I don't think it's necessarily 'large sums' (a good stooze would be £10-20K) that will attract the attention of the relevent bodies - after all, the money could have come from a redundancy settlement or a lump sum pension payment. More likely it will be the annual sum or frequency thresholds that trigger the alarms, I would have thought?

It does beg the question though; why wasn't the account holder asked to explain the transactions to his bank, before Revenue & Customs were alerted and enquiries instigated - if indeed that was the sequence of events?

HMRC would be more interested in the amounts than the frequency - particularly so if the information on their tax returns does not match information provided by banks etc. I am sure you cannot be serious that you expect banks to start to question transactions - there line of business is to banking - people put money in and take out! The banks notify HMRC and as schiff said so eloquently and correctly HMRC use the info VERY selectively. Joe Bloggs wil not be questioned over interest payment - there must always be the possibility that there is something worth investigating.

xwraith

i think they can probably gain full access to ur account now

Xbigman

There are lots of ways someone can get referred to the IR. Current favourite is money laundering but there are others. As already mentioned it is possible to be looked at because of earning lots of interest or the national insurance people can instigate an investigation if they think you have a second job and are not paying NI on it. Then there's the child support agency. They usually do there own investgating but can stir up the IR, who then do their own.
None of this is anything to worry about if you are just stoozing. As for keeping CC statements, I do but it is not really nescesary. Worse case scenario is that your CC provider will sting you for a few pounds for copies.

As for the IR overestimating. Any business is legally obliged to keep records so when these records are not available the IR takes a worse case scenario approach and comes up with a figure. They know these are usually high and they also know that throwing high demands around is a very effective way of getting people to find missing information.

My landlord had a friend who did up old bangers and sold them. Mr IR knocks on the door and asks if he is running a business. He denies this 'just a few odd sales' is his claim. Mr IR pulls out a print out from the local free ads newspaper 'can sir explain why he has advertised 30+ cars in 18 months'. Mr IR, on hearing there are no records, then estimates that 30% profit margin on 30 cars assuming they sold for 90% of advertised price = 12k tax demand.
Landlords friend pays up. Mr IR returns, where did landlords friend get the money as nothing came out of his bank account. LF says he sold his own car. Mr IR thens speaks to DVLA. LF has 3 or 4 cars in his name and indeed did sell a car for 14k. Mr IR now wants the tax on the 14k sale. And on and on it went. This is a prime example of how they work out tax when no records exist.
Regards



X

Thefunkygibbons

YorkshireBoy wrote:

I don't think it's necessarily 'large sums' (a good stooze would be £10-20K) that will attract the attention of the relevent bodies - after all, the money could have come from a redundancy settlement or a lump sum pension payment. More likely it will be the annual sum or frequency thresholds that trigger the alarms, I would have thought?

It does beg the question though; why wasn't the account holder asked to explain the transactions to his bank, before Revenue & Customs were alerted and enquiries instigated - if indeed that was the sequence of events?

The regulations are that the bank would commit a criminal offence if it tipped off an account holder that there was a concern

The rules are such that there are lots of things that you cannot do

If you bought a £15k car with cash, then that would have to be reported

YorkshireBoy

sarahlouise210 wrote:

I am sure you cannot be serious that you expect...

I didn't say it was something I would 'expect' Sarah - I was offering a 'thought' based on my bank's online banking single transaction limit of £5,000. That was my logic for suggesting it 'might' be the total amount, or number of transactions, rather than one large sum transaction that triggered any kind of response.

Thefunkygibbons wrote:

The regulations are that the bank would commit a criminal offence if it tipped off an account holder that there was a concern

I can see that TFG, but I've had calls from my bank to verify certain transactions I've carried out - not exactly a 'tip-off', more a check that it's actually me who has initiated the transaction.

schiff

Some good stuff on here since I posted my twopennorth last night.
Bordera - money laundering wasn't much of a factor 'in my day' (makes me feel old!) but I'm sure you are right.
xwraith - I think you are wrong (with respect). The only times the IR will get 'full' access to your bank accounts is when you are thoroughly under investigation and, even then, as I understand it, they will ask YOU to provide the info they want.
xbigman - an excellent example of how the IR conducts an enquiry! They just keep at it, remorselessly.
It all comes back to the basic rules - keep your nose clean with the IR, keep records and don't upset them!
Any number of people get away with not paying the tax they should, so you can't blame the authorities for fighting against it. If you get away with it, good luck to you. But if you get really into a full investigation, it is traumatic in the extreme and you wouldn't wish it on your worst enemy. I've seen its effect on people - health, family life, sleep, they can all be affected.
End of sermon for today!

smartsaver

All looks a bit scary. Mr SM does pay higher tax but only just and this is deducted at source. We have never been investigated before and although, as I said we did pay off our mortgage we took out another for the same amount. Will look at the form in greater detail and report back form nuber etc. We have never unknowingly under paid tax.

We have had an average stooze pot of 75k over the past couple of years. As said before this is now offset against our mortgage. The banks are still supplying us with credit cards!

The IR will be after my Tesco points next :rolleyes:

smartsaver

What we have recd is a letter not a form. Below is detail of the relevant bits:

'I am writing to tell you that I intend inquiring into your tax return. Each year we enquire into some tax return to check they are right, or because we nee further information to understand the figures. We want to make sure you pay the right tax, not too little or to much. Either way I will tell you if something is wrong.' Blah blah blah


They need
P60
P11D
Personal pension payments certificate
Details of investment income - banks, buildind society, untit trusts, dividends, national savings.
All investment holdings

'Various searches are undertaken before the commencement of enquiries into returns and information held suggests ypu held several credit cards in the year ended 5 April 2005. This is an area I would like to review as part of my enquries therefore please let me have credit card statements covering the period 6 April 2004 to 5 April 2005 for all credit accounts held in this year.'

It goes on to say 'we notice you have paid off your mortgage and took out another on the same date' blah blah blah.

Ther was no mention of large sums of money as originally posted. This was Mr SS own comment.

It all has to be returned by 16 Feb so we are on the case today. What fun on a sunny Saturday