HMRC issue

HMRC issue

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We have a case with one of our clients whereby HMRC are seeking to collect on a VAT debt due from his then sole trader business, this is dating back to 2002 when the final return was completed for the business.  We did not act for our client at this time and we do not have any paperwork to refer to in order to dispute this debt.

Has anyone got experience of a similar case in terms of unreasonable time delays by HMRC.  They are not threatening court action in respect of this.

Thanks

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chips_at_mattersey
By Les Howard
01st Jan 2013 13:34

HMRC delays

HMRC undertake periodic reviews of 'uncollected' tax. Unfortunately, it is frequently incorrect. Most that I have seen have actually been collected long ago, and they have made accounting errors; in some cases, taxes are wrongly categorised, CT as VAT, etc.

I would ask HMRC to provide an accurate and complete schedule of the debt, and how it arose.

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By stgreg
01st Jan 2013 16:05

is it not out of time?

This debt is 10 years old - surely it is statute barred?

And because it is so old your client will probably not have any records as in most cases records only need to be kept for 7 years. So how is he to know whether it was paid or not? Just because HMRC says so!?

We have a case which has been running since about May 2011 where they are claiming that 2009/10 is underpaid. It looks that way in their information but they have been misallocating payments ever since payments were made electronically and now they are trying to sort it out.

They changed tack at one point and said that it was to do with a repayment in 2004 but when we pointed out that this was out of time stopped that line and now they have "reviewed" (their word) 2009/10 and seem to have started to go around the whole loop again.

They sent the bailiffs in about a year ago in the middle of the corespondence, with no notice at all, to a company that has no tangible assets. But they went away when someone told them that anything that was owed would be paid.

With hindsight it would have been cheaper to pay the bill (about £700) than argue but we are where we are and we intend to bill HMRC when it is resolved.

But my client is concerned that HMRC will dig into other areas (and waste more time) simply as an act of revenge. Is this concern justified?

 

 

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chips_at_mattersey
By Les Howard
01st Jan 2013 18:36

Out of time?

I can't see that a debt is out of time simply because HMRC fail to collect it. Your argument that the taxpayer may not have sufficient records to verify the debt is valid, but then you are relying on HMRC's discretion not to collect.

From your comment, it seems likely that we will be seeing more of these cases in the coming months.

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