Best way to negotiate back taxes with HMRC

Best way to negotiate back taxes with HMRC

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I have a relatively new client who has been investigated by HMRC and found to owe considerable amounts of tax from 2009/10 (20,000) and 2010/11 (5,000).

HMRC have told him that as soon as he starts to pay they will then also hit him for interest on all the back taxes, back to when the liability first arose.

Are HMRC ever flexible or open to negotiation in these sort of circumstances? Are they likely to cut a deal to reduce the amounts payable or consider waiving interest charges?

If anyone has any experience of hoew best to try to negotiate it would be very helpful

Thanks

Replies (10)

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By Tim Vane
30th Oct 2015 03:06

I certainly hope not. I sympathise that you are trying to do the best for your client, but it sounds like he's only getting exactly what he deserves.

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Stepurhan
By stepurhan
30th Oct 2015 07:51

No penalties?

If they've owed that amount of tax for that long, I'm surprised HMRC aren't going for penalties as well. As that doesn't appear to be the case, then I'd say you've got a good deal already.

On the information given, your only justification for reducing the amount due or waiving interest is because they'd rather not pay that much. On that basis you, quite rightly, haven't got a chance. What mitigating circumstances do you think there are that makes your client special?

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By SteveHa
30th Oct 2015 08:56

I'm surprised HMRC didn't go for a contract settlement, which would involve an offer to pay taxes, interest and penalties, and which is open to negotiation (Without fail, I always offer an amount lower than HMRC's suggested figure, and without fail it's accepted). Having said that, I can usually find a justification for reduction, which helps.

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Replying to Glenys:
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By whatdoyoumeanwashe
30th Oct 2015 09:26

What justifications?

SteLacca wrote:

I'm surprised HMRC didn't go for a contract settlement, which would involve an offer to pay taxes, interest and penalties, and which is open to negotiation (Without fail, I always offer an amount lower than HMRC's suggested figure, and without fail it's accepted). Having said that, I can usually find a justification for reduction, which helps.

I'm interested in what justifications you find help in these situations? I'd generally say tax + interest is as good as anyone can hope for, assuming the tax really is owed, otherwise why would anyone bother to pay their full tax bill if they could cut a better deal at a later date?

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Replying to ireallyshouldknowthisbut:
By SteveHa
30th Oct 2015 12:13

Often times you will find a fault in the way HMRC have calculated the interest, or use of estimated figures to arrive at the tax. In both cases there is always wiggle room.

Thanks (1)
David Winch
By David Winch
30th Oct 2015 09:25

@arthurallan

You may need to consider whether you have a reporting responsibility under MLR 2007 / s330 PoCA 2002.  That will depend very much on the circumstances in which the tax underpayments arose & how you became aware that they had.

David

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By whatdoyoumeanwashe
30th Oct 2015 12:22

Ah ok. That's really a matter of fact, i.e. correcting HMRC's errors, rather than negotiating them down though.

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By SteveHa
30th Oct 2015 14:13

I take your point, but I've gotten away with arbitrary reductions before today. Not too much, but HMRC don't seem to have the will to quibble over smaller amounts.

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By pawncob
30th Oct 2015 16:57

Always

Treat HMRC as the bunch of horse traders that they are.(with apologies to any horse traders who may read this)

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By Saphire23
02nd Nov 2015 20:49

Ex horse trader
HMRC will not negotiate on interest so you need to concentrate on reducing the tax liability in order to reduce interest payments. You could clarify any estimates used, also if there were any HMRC delays then you could ask for interest not to be applied in those periods.

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