Massive tax problem ... please help

Solar1

You say you had to hold your hands up to a major error on your part. What type of error? Given what you have said this must be strong enough ammunition to send you a bill of £70k. If it relates to one year what proof of this do you have? In the last three years you have evidence showing your turnover has dropped .

As you say that the investigation has been going on for 4 years the year of the investigation that is causing the problem must be around 2001. Thus if the investigation was started in say 2002 why does the taxman think you are daft enough to be the centre of an investigation and still carry on doing the same thing.


Regarding Geo55's remark the taxman does not get paid a commission on the tax paid.

I do agree though that you should not just accept it . Why has it taken this long to arrive at the figures . I would contact your agent and ask for all copies of correspondance regarding the matter and his replies. Failing that I would contact the taxman and ask him for copies of correspondance and why the delays have occured. You need the information from both sides to ensure everyone is telling you the truth.

If your agent is unqualified you will have no recourse. The penalties however may be negotiable.

If you wish pm me and I will tryt to help.

clipboard2

wassup wrote:

clipboard... sorry didnt notice ur post b4 i did mine.

I had to hold my hands up to a major error on my part and I was prepared to pay for that. But i didnt expect them to multiply the tax due by 7 years. Its quite a shock.

I did my own accounts so nobody to blame but myself... doubt if i could afford a top lawyer... wud come to more then the tax due probably.

So you did your own accounts.

What, exactly then is the role of this agent, that you mention?
I think we are all getting confused here.

By 'major error on my part' do you mean that you failed to declare untaxed income?

We are all on this thread trying to help you and it would help us to help you if you clarified these points.

Cook_County

I have over 25 years of experience as a tax adviser. I am indeed - among several other qualifications - a Chartered Tax Adviser. However I do not specialise in investigations.

There are however several advisers who do. It is unlikely (to say the least) that you will find the solution; or a properly qualified investigation specialist; from an open forum such as this.

You need - desperately - a specialist in handling tax investigations. If you contact the Chartered Institute of Taxation they may well be able to suggest one or two local to you who are investigation specialists.

I would suggest that your first job is to gather evidence. Evidence will firstly include all records you currently hold - eg bank statements, bills, credit card bills, records of the business etc. Secondly you MUST make a subject access request of your existing adviser, requesting s/he provides you with copies of all paper and computer records relating to the investigation. Thirdly you MUST make a access request of HMRC, requesting that they provide you with copies of everything related to the investigation. Fourthly, you MUST make a access request from all relevant institutions for records you no longer hold that will support your case (eg bank statements, bills etc).

For the amounts concerned, the weight and gravity of the offence plus the delays you will face potentially horendous penalties. I'd expect accounting fees of £5,000 to £15,000 plus VAT to get this settled - plus more if this turns into a criminal prosecution. A good specialist should be able to save you considerably more. And yes it will be horrid and tearful, but the sooner it is settled the sooner you know how much you need to borrow to pay it off...

debtfreelondon

When I first started out training in accountancy I had dealings with the IR in a long term investigation. You wouldn't believe the lengths that IR will go to to prove the amount you've received in income and not declared.

One thing they will do is look at similar businesses to yours. Remember, they have details of millions of businesses on file. They can average the earnings for all similar businesses and use this as an estimate. Yes, it would be up to you to disprove this but there will come a time when you have to admit there is nothing else you can do.

Unless you kept every single invoice for the past 7 years for business and personal expenses and kept a diary showing every single minute of every day and what you spent it is unlikely the "true" position could be ascertained.

Check whether your agent has agreed anything with IR. As your agent they have the ability to agree liability with IR.

On a lighter note, heard of an IR inspector who stood outside a prostitute's house counting the number of punters she had through the doors to estimate her earnings!

schiff

wassup Hi!

I've just read this thread for the first time so I'm able to take a detached view, though being ex-IR (a long time ago), I do have an interest.

You have been given the most fantastic and detailed help right from the start but you just don't seem to be helping yourself. Your 'helpers' will, I am sure, be getting frustrated with you. There is such a shortage of information coming from you - to a large extent very understandable as it's highly personal and confidential. But there are background things you should have no trouble with. Let's see if we can get you on track:

1) You must have a letter on headed paper from your 'accountant'. Apart from his name tell us exactly how he is described eg ACCA, AAT, etc. Perhaps better still PM one of the kind posters who have suggested a PM, with his full name and address for them to investigate your accountant's credentials more fully.

2a) Does he give you copies of your accounts?
2b) Do you see copies of the correspondence between him and the IR?
2c) Does the IR ever write letters directly to you - other than sending returns, assessments and standard forms of course?
2d) Have you ever been to an interview with the IR on your own?
2e) Have you ever been to an interview with the IR with your 'accountant'?
2f) How often in an average year do you have face to face meetings with your accountant to discuss your affairs?
2g) How much do you pay him per annum?

NB: 2a to 2e - just answer yes or no. 2g - don't say if you don't want to. It's just to judge the value that your accountant puts on what he believes he does for you.

Finally, have you taken any steps to find the sort of professional to help you, that your friends on here have suggested. If you don't look, you will never know what it might cost to get you out of this mess.

I sympathise entirely with you. If you have told us the truth, I just cannot understand the IR's attitude, faced with some of the relevant facts you have told us. Even disregarding their notorious ruthlessness. But you must help yourself and neither you yourself, nor by the sound of it your accountant, have the capacity to do this. You must get help (and not just rely on people here, as they would need to know and see everything to even start to help you).

Sorry if I've sounded tough but it's for your own good ultimately. Good luck.

schiff

cash99

Wassup you still have not said what the error was that you made. It must have been significant.

HMRC only review a very small percentage of accounts and returns they receive, and investigate even less. What they do do however is target cases where they believe tax has been underpaid. From personal experience if you have done nothing wrong, and have the accounting information to prove it (which by the way you are legally required to have), then they give up and move on to cases where they may recover money very quickly. If you have made a genuine mistake, and come clean then the matter can be dealt with quickly.

If you have been evading tax and are not co-operative in an investigation, then get ready to be taken to the cleaners.

You either need to contact a tax investigation specialist or pay the tax.

wassup

Thanks everyone for the advise and offers of help. My case is not simple and there are a lot of in and outs I dont want to go into here.

I dont have and never have had an accountant... i said this already.

What i have is a an agent who has been acting on my behalf. I believe he is an accountant, but he also has experience of tax investigations. His professional opinion is I should settle at the figures suggested. Both he and I know the figure is unfair, but his experience of IR is to get the case closed asap and settle rather than fight on and go in front of commissioners.

At this point in time thats not what I want to hear, but going by what I read here there are mixed opinions on this.

I will probably take his advice and pay up. I've met planty of people who have had cast iron cases and still lost out to IR.

All I'm saying is it's a sad state of affairs when innocent people are taken to the cleaners by the government.

Pennywise

Wassup, you came on here asking for advice. You have been given plenty of advice but have ignored it. More information has been asked for - quite reasonably - including the qualifications of your advisor - you have not responded. May I politely ask why you asked for advice if you had no intention of taking it?

wassup wrote:

All I'm saying is it's a sad state of affairs when innocent people are taken to the cleaners by the government.

I'm never one to side with the Government, but in this case, I feel you are on nothing more on a one-man rant after being found out.

Your agent appears to be a first class idiot, as you have been told. If you want to pay the demand, that's up to you, but it is your own and your agent's fault not the Governments!

wassup

I didnt ask for advice... i asked for other peoples experiences in this situation.

I'm fully aware what my options are... i can pay it or fight it... thats it.

If you read the experiences given on this thread you willl notice that those who have tried to fight have lost.

Nobody has come on and said I fought and won.

My opinion has not changed, that is the ir have powers to make people pay more tax than they are due and it is not fair.

I have already done most of the suggestions given. I have presented evidence to disprove the ir figures but it has been ignored. I know for a fact i didnt earn the amounts they claim. They are basing their figures on assumptions, which they are allowed to do.

The question I have in my mind is... is it worth fighting... and given the responses so far I would say not.

I am not ignoring what others are saying.... I am very grateful for their input, they are helping me decide what to do.

wassup

Have decided to fight on. They set penalties at 60%, which is not acceptable to me, and glad to say not to my agent either. Made an offer of 60k instead of the 78k they wanted, but they said that wouldn't do.

They also offered no time to pay.

They weren't interested in looking at my lifestyle or any of my records.

They have deffo got it in for me.

One thing I did notice was the inspector did not like my agent at all. It was obvious that the 2 had had run ins before and it was almost as though they were glad to be winning against him for a change.

Maybe if I get somebody else to handle it, they might come and go a bit more.

Supposed to be going to commissioners now... will wait and see.