A couple of times, clients who have done something wrong on a tax return have suggested that they think HMRC will impose a harsher penalty if they represent themselves than if I represent them. Does anyone have a view on whether or not HMRC impose harsher penalties on unrepresented taxpayers? Presumably the reasoning would be that the agent is likely to be more effective in contesting it than the taxpayer.
Replies (7)
Please login or register to join the discussion.
Yes
I think there has been a number of cases where the appointment of a professional led to better outcomes for the taxpayer, for example, suspension of penalties.
I'm 100% for professional representation.
Sure do
Thanks everyone. I was thinking more of HMRC's initial "opening" penalty, before negotiations start.
Penalties arise from careless errors. Would you consider a taxpayer not seeking professional advice from either HMRC or an adviser to have taken reasonable care? Probably not.
perhaps the difference
is that as advisers we know that the penalty can be negotiated whereas an unrepresented taxpayer may not realise this. They may think it is all or nothing.
It also seems to be the case that some simple "checks" go along the lines of looked at your return this is wrong carelessness here is the penalty. Taxpayer may not realise they can challenge HMRC at all, let alone on the penalty. Obviously we then only see the ones where the taxpayer then decides they need further advice - how many just pay up?
Yes I have a view
The new penalty regime is meant to be a simple "tick the box" system however as humans tick the boxes and we all have different opinions on different things the result can be highly variable.
Some taxpayers (and also some agents) still don't fully understand the rules or follow them fully and it takes a lot of work to analyse the the emerging case law on this topic (which is what we try to do on our webservice for accountants www,rossmartin.co.uk). The result is that you have a mixed bag of results and normally HMRC try and get what they can from whoever they can but they will generally climb down when challenged. Hopefully the latest penalties review will have a knock on effect and we will see a more consistent approach from HMRC in the future.