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HMRC want to see bank accounts based on false evidence

I am in an ongoing enquiry with HMRC. Recently, HMRC asked me why the value of my shares had doubled within a particular year. They were implying that I had bought some shares and wanted to know how many. When I looked at my account I had not performed any trades that year, and in fact the value of the shares had decreased slightly. I told HMRC this. Their response was to say they are not happy with my answer, and want to see 5 years bank statements for all my accounts. I believe they are making false accusations in order to gain access to my bank accounts, and feel this is a violation of my human rights. What should I do?



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appeal their request

to the first tier tribunal

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It is an INCOME tax return, not an ASSETS AND LIABILITIES return
It sounds as though you may have already allowed them to go fishing into your affairs. I don’t know your circumstances, and something is telling me (not saying you’re dishonest) that you haven’t given all relevant information, but just based on that information (and the idea that nothing untoward has been revealed) I’d either:1. Continue down this route and write to them with details/source to proof the shares value at the start and end of the year, also copy them dividend certificates, inform HMRC that info is correct but if they think otherwise then HMRC should co-operate/reduce your costs/stress by providing evidence and facts to support their claim; otherwise you’d like the enquiry closed.or2. Write back to them and state that you have supplied them with correct information and would like to help HMRC further with their enquiries but are prevented from doing so because it has not substantiated its claim that there is anything wrong with your tax return. Request that if HMRC have any legitimate concerns with your tax return figures of year “X” then please forward such immediately with any evidence of wrongdoing, which would enable you to further cooperate, otherwise ask that they close the enquiry.You could state that since no share movements have taken place there is no capital gain or loss on the tax return, and no evidence of wrong doing, then request an explanation as to why they are investigating non-income tax return items. (To merely check your dividend income, as per tax return, they should only need to know how many shares and return per shares)If you really wanted to push the violation of human rights angle, then do so in terms of politely asking the Officer to justify by explanation how HMRC considers that the request for bank statements for 5 years is both necessary and proportionate in regards to Article 8 HRA 1998, also their positive public duty to protect your rights under section 6 of that same act.If no satisfactory response, then ask for closure of the enquiry.I strongly advise you to obtain accurate advice from a tax professional that is suited to your exact circumstances.

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Do I have any rights to see the evidence/ figures HMRC have?

Thanks for the advice. I have sent the proof to HMRC, and I am awaiting their response. Do I have any rights to see the evidence/ figures they have?

Kind Regards

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Try it

Do I have any rights to see the evidence/ figures they have?

Kind Regards


Posted by 2kool4skool on Thu, 03/02/2011 - 20:55


Write to them requesting it.

They will reply refusing to disclose wha they think they have.

At that point write back stating that if there is not to vbe a proper exchange of informnation it is clear that they have no interest in reaching a proper and fair resolution and you will assume their enquiries are therefore closed.


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..after the enquiry is closed you can make a DATA PROTECTION ACT request to CHECK the accuracy/contents of their enquiry file, though if they have been up to no good then they will remove the incriminating parts or simply deny you access to the whole file on the basis that it may prejudice the collection of tax. The latter may not stand up in your case, but they may choose to play a few other games.

HMRC may now try to claim that they have new lines of enquiry and still need the bank statements, to justify often making similar spurious unsubstantiated claims such as the information you submitted is inconsistent in itself or with third party information they can't release to you (probably because it doesn't exist or is so general in nature that it wouldn't stand up as evidence).

But...and this is a strong warning.... the general information related to you in this thread is on the basis that you have paid your correct taxes, if there is under declared tax then take tax advice specific to your needs as a complete change of tack is required.


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Bank statements

Thanks for the advice. The investigation has been going on for 18 months, and they have established that I have had some undeclared income, but haven't established whether I owe any tax as I have had expenses which offset the income. Am I still able to refuse my bank statements if they demand them on the grounds that I've had undeclared income?

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If the irregularities are material, then they probably do (it doesn't always follow) have an objective reason to request the bank statements for the year they are investigating. It is another matter whether they can go back into other years.

An enquiry lasting 18 months with irregularities established but only now do they ask for bank statements! That doesn't quite sit right. No one here can give you accurate advice because you are withholding so much information, much of it due to the fact that you don't know its relevance, but if you are not happy with the progress of the enquiry (and based upon the vague info you have provided) I'd send the bank statements for the year in which irregularities have been established and ask the Officer to summarise/finalise the enquiry queries by say 10th March as you'd like to end the enquiry.

I strongly advise you to obtain accurate advice, which of course has to be based upon your particular circumstances.

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Thanks.I do have an accountant, but feel that he is letting HMRC walk all over me, and not defending my case very well, so I've decided to do my own research to find out what HMRC are allowed to and not allowed to do.

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They have asked for bank statements for the years 08/09 and 09/10, and do not have any material for any irregularities, as these years were not taxable when the enquiry began. Are they allowed to ask for statements for these years? My accountant told me I didn't have to do a tax return for these years, as they were during the enquiry. Should I have completed one?

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Your accountant is best placed to give you advice

I can't give you that advice because I don't have the relevant facts, the only person who can do so is your accountant.

It is a taxpayer's duty to ensure their tax return is correct and then pay the correct tax, so if material irregularities have been established then it is up to you to correct them. (It isn't a game where you hide what you can get away with, leaving the HMRC Officer to hunt and scrape around). Once you have declared/paid/proved the correct tax liability (and do it asap) then HMRC won't have the justification to investigate further and will be on the back foot, it is this strategy that hinders fishing expeditions and undermines their ability to charge crazy penalties.

But it may be cheaper to simply give HMRC certain papers and let them give you their figures, they are usually full of errors or crazy logic/reasoning and can usually be undermined quite easily. It may simply be the case that the Officer has spent so much time on the enquiry yet failed to achieve a result (ie you owing more taxes) that they are scrapping around for anything to justify an assessment. It may also be the case that HMRC are wasting your time and money in order to pressurise you into accepting a daft assessment.

Only your accountant can have an accurate opinion on this.

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