Inland Revenue - Gone Fishing? | AccountingWEB

Inland Revenue - Gone Fishing?

I received an unsolicited standard letter from the Inland Revenue yesterday.

The first half was re-assuring, wondering if I might have paid too much tax - fat chance of that, I thought!

Turning the page, the true reason for this fishing became more apparent, as the Revenue then speculated that I might have paid too little tax.

No problem so far, but what followed was a list of categories of people from which the Revenue required an annual Tax Return.

I count myself lucky as I have never been sent a Tax Return to complete. I don't feel lucky because I have anything to hide. On the contrary, my tax affairs are very straightforward given that I am an employee paid under PAYE. However, since being appointed a Company Director in August 2003, I have been expecting the arrival of my first ever Return, and my perception is that once the IR have you on their little list, you will be completing the wretched things for the rest of your days. And however simple one's affairs, there is obviously an annual time, cost and hassle implication in this.

My question is whether, given that Company Directors are listed in the IR Fishing letter as a category from which the Revenue requires a Tax Return, am I now obliged to write to them to request one? I am loathed to do so - see my reasoning above - and given that the names and addresses of Directors are in the public domain via Companies House, I hardly feel like I should have to respond to a random fishing expedition, when the IR could easily obtain this information anyway.

One slight complication:-

I invested in shares in my Employer's Company following an MBO in 2001, and have been paying interest on the loan I took out to buy the shares ever since. I have never received tax relief on this interest (though I understand it is, theoretically available). If I bite the bullet and request a return, would I be able to claim relief on prior year's interest payments on this year's return? Or have I now missed the chance to get the previous year's relief?

Thanks in anticipation.

A Taxed Director

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ouch, for a company director........

martinfoley07 |