Help with tax evasion investigation.

lovinituk

bluelass wrote: »

Pennywise who on earth said my friend was a man? I never mentioned gender in my posts.

What difference does it make? They made an incorrect assumption. It has no bearing on the outcome.

bluelass

lovinituk wrote: »

What difference does it make? They made an incorrect assumption. It has no bearing on the outcome.

Im well aware gender doesn't make a difference to a tax investigation:D im just asking how they arrived at the conclusion that it was a man.

RuthnJasper

Have HMRC contacted your friend again during the last 11 days? Do you know if they intend to take any action? If so, how will they know from the Facebook entries how much she has been charging for her services? It might be difficult to establish an audit trail.

bluelass

RuthnJasper wrote: »

Have HMRC contacted your friend again during the last 11 days? Do you know if they intend to take any action? If so, how will they know from the Facebook entries how much she has been charging for her services? It might be difficult to establish an audit trail.

Ruthnjasper the HMRC have noticed the mention of private gigs on my friends timeline going back some time. And from what I am told ( by friend) the tax have made an estimation that my friend would have received at least minimum wage rate if not more for supplying these services. A DJ doing a gig at a wedding or other function usually get paid a few hundred or so, therefore the tax have made a determination figure based on that. My friend has been given the chance to give them a figure of what she determines she owes and after a month if she hasn't told them then they will come to their own conclusion and act accordingly to recover the money owed.

bluelass

My friend has been told she owes £6700 and has to pay by 1st February 2015 or will incur interest.

chrismac1

Your friend needs expert advice unless she thinks this 6,700 is in the right ball park. There have been a couple of recent Tribunal cases where the determinations were just utterly ridiculous beyond belief. Rather than do the sensible thing and back down a bit and agree a realistic number the officers concerned plunged blindly on and ended up looking stupid and getting much less tax in than they would have got in had they have been sensible.

In these cases the tax being claimed by HMRC was 5 to 10 times the level the Tribunal judges thought was realistic for the businesses concerned. One aspect of one of them which sticks in my mind is that the owners would need to have been working 26 hours each every day to make the profits! So everything else in their lives would have occupied minus 2 hours per day!

If she's going to win a reduction, she's going to need help, someone who can build up a sensible level of takings from her appointments diaries and who knows what expenses are claimable - funnily enough HMRC always assume these are near zero in their calculations!

bluelass

HMRC say because she has been doing this part time DJ thing for over 3 years their estimate is correct.

chrismac1

Of course they're not going to write to you and say "Dear Taxpayer, we made up our numbers. Yours faithfully HMRC". But that is the reality of many of these determinations. She firstly has to estimate her own takings for the 3 years and see if that is anywhere near the HMRC numbers.

Then she should consider her expenses. DJs I've done the books for have generally had quite a lot of expenses - mileage, equipment, phone costs and so on - it's highly likely HMRC will have included an amount for this which is well short of the actual spend.

bluelass

My friend contacted a solicitor experienced in tax matters.He said the estimate was about right and suggested she offer HMRC £5000 therefore saving herself £1700.

Savvy_Sue

I'd have thought an accountant specialising in small businesses and personal taxation would be a better person to consult than a solicitor at this stage, but hey ho.