Inland revenue (IR) interest in stoozing?

smartsaver

PokerPortal wrote:

From what we have been told it seems to me that the OP is not sure if higher rate tax was paid (hence the link to the article) and that no interest was declared on savings. Although the stooze money was transferred to the basic rate taxpayer's account, it was sat in the higher rate taxpayer's for a while. Since the OP has been stoozing for a few years with a large stooze pot, the interest accrued can easily be in excess of £1000. HMRC will be interested in that.

1. The OP is not the one being investigated it is the OH so OP read article and posted before speaking with OH.
2. Have checked with OH who thinks he is paying tax for England and certainally at a higher rate. :mad:
3. Money sat in joint curent account which is declared as higher tax payer.
4. It is a lot more than £1000 but tax is paid at source in places mentioned above.

Latest update: IR called Mr SS and advised they need all credit card statements:
'to see what he's been paying for etc ie to check if he's been living a far higher lifestyle than could expected with his declared income '

All money has been stoozed not spent and is recoverable. We have nothing to fear so will send them all in. Will keep you all posted.

schiff

All agog! Can't wait.

smartsaver

Have removal van booked to get all the statements to the IR They should be careful what they wish for

ctm_2

smartsaver wrote:

Have removal van booked to get all the statements to the IR They should be careful what they wish for

You might find it easier (and cheaper) to arrange for you to take them to your nearest HMRC office in person, and have them send them on to the correct office. May save you a bit in postage (this is money saving expert after all!!)

Bordera

smartsaver wrote:

Latest update: IR called Mr SS and advised they need all credit card statements:
'to see what he's been paying for etc ie to check if he's been living a far higher lifestyle than could expected with his declared income '

All money has been stoozed not spent and is recoverable. We have nothing to fear so will send them all in. Will keep you all posted.

So they want to know what you have been putting on your credit cards? ie, why you are getting into debt and can your income support that debt?

The cheeky......!!!!

If the banks have decided your income can support the credit card debts why do HMRC feel the need to double check? They are not entitled to do that SS.

A thought. If the credit cards are in Mr SS's name only, then the debt is legally his so any resultant interest on the stoozing would be his also. They could be after higher rate tax on ALL the interest resulting from stoozing.

smartsaver

They are cheeky b*****rs!

The debt shifts around between us. Mr SS gets the highest credit limits and it is usually split 2/3 Mr SS and 1/3 Mrs SS.

Current stooze pot is Mr SS 47K & Mrs SS 32K.

Surely we can legitimately put the money into a savings account owned by either one of us once the money has passed through a joint current account? Isn't it lent by the banks to do with what we will. Isn't is usual for the lower tax payer to bag the stooze pot? If we do have to back pay tax as Schiff estimates it's around £700.00 we will survive.

What can we do? Don't want to wind them up when really this is all quite innocent. Could we argue as I do all the work the extra tax I gain is my 'cut'?

The money is now in a joint savings account offset against our joint mortgage. What can they do about that? We gain no interest on the 'savings' but equally pay no interest on the mortgage.

Do you suggest we refuse to send the statements? Surely that will look more dodgy Really appreciate your help.

Bordera

smartsaver wrote:

What can we do? Don't want to wind them up when really this is all quite innocent. Could we argue as I do all the work the extra tax I gain is my 'cut'?

The money is now in a joint savings account offset against our joint mortgage. What can they do about that? We gain no interest on the 'savings' but equally pay no interest on the mortgage.

Do you suggest we refuse to send the statements? Surely that will look more dodgy Really appreciate your help.

Ownership of assets is usually a matter of fact. Transfers of assets between husband and wife are fine as long as the income/interest that asset earns follows suit. If you had a joint account and capital is owned 50/50, the interest is taxable on you in the same ratio in normal circumstances. If one spouse pays tax at 22% and the other at 40% they cannot retrospectively say that the interest belongs to the spouse paying tax at 22%. However, your offset mortgage arrangement now overcomes any problems you may have had with this.

Turning to the statements request, there is nothing at all dodgy about protecting your privacy. Requests for bank statements are often challenged, especially when they are received at such an early stage. If there is no justification for the request, it is withdrawn. I known this to happen many times.

I think HMRC may be on very uncertain ground here and I would not advise anyone to hand over the large amount of information they have requested from you without asking a few serious questions of them first questions first.

As mentioned before I do not have any special expertise in investigation work but have seen many Section 9A enquiries in my time. This one is very unusual. SS I think that if that tax return had been submitted via an accountant you might not now have this enquiry. As Cook_County says, this type of investigation is usually run by an inexperienced or trainee inspector, often one who is perhaps over enthusiastic and keen to make an impression.

My advice to you would be to talk to a tax specialist before going any further with this. I am sure there are good people in your area who will not charge you the earth. They may even be able to suggest further ways to cut your tax bill.

Or at the very least, follow Cook_County's excellent advice and answer the first part of the letter and ask that the Inspector is more specific about the credit card statements. This should not antagonise the Inspector. If the enquiry has been properly considered then he or she will be able to tell you why the request has been made and give an indication of what it is they are specifically interested in. The responses you have been given to date have been rather vague if not a little economical with the truth. If they still insist on having the statements, then adopt ctm's strategy and arrange to take them to a local tax office and ensure you get a receipt.

Good luck.

PokerPortal

smartsaver wrote:

They are cheeky b*****rs!
Current stooze pot is Mr SS 47K & Mrs SS 32K.

Surely we can legitimately put the money into a savings account owned by either one of us once the money has passed through a joint current account?

Ofcourse you can, as long as Mr SS pays his 40% on his interest. In my opinion, if you explain your stoozing activities to the taxman you will have no problems. If you owe them any tax, you will have to pay that. Don't think this will be a problem, there might be an additionla interest charge and small penalty. Interesting though, that HMRC are investigating taxpayers on PAYE.

smartsaver

Mr SS just composing a letter and has agreed to send in first part of info required and will wait to get IR justification before we send more.

Thanks for all your help guys.

scotsblood

A piece of advice from my accountant seems to be perfectly appropriate here;-

" Dont ever screw with the revenue or vat men, they have screwdrivers bigger than you can ever imagine ".

Having followed that advice ever since, and been nice with it, I've even been given some "off the record" decent advice by those very people paid by us to collect our taxes!

If you take an adversarial approach they only think you are hiding something and get the screwdrivers out, its only human nature!