New client with a Determination going back to 2000/01 and arrears from 2007/08.

New client with a Determination going back to...

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I've been approached by a new client who's just received a threatening letter from an external debt collection agency on the orders of HMRC. He seems to have adopted the classic "head in the sand" approach to all previous HMRC letters so time is now very short.

The HMRC statement of account shows a determination of £800  for 2000/01 which has also triggered payments on account for 2001/02 and 2002/03 with the associated penalties/surcharges/interest etc. There's then a further amount for 2007/08 (I can't tell from the statement if it's a determination or actual) with interest/surcharges to date. The total amount being chased is now in excess of £7,000.

There's little paperwork available - the client is an Aussie national who has been in and out of the country, and says that he passed on some records to a previous accountant who's since also returned back to Australia.

For 2000/01, he believes he was working for an umbrella company and received salary+dividends but has nothing to substantiate this. For 2007/08, he has provided a HMRC letter confirming employment income/details which makes the amount currently shown on the HMRC statement for this year look odd (he's due a refund if anything for 2007/08 from the figures I can see).

At this stage, if he went back to his bank for copy statements to complete a tax return, would HMRC even process/vacate the determination for 2000/01, or is that now set in stone? Also, for 2007/08, is he out of time to submit/resubmit a return with the employment income correctly?

(I wouldn't normally take on this kind of client but he's a family member of another very good client, so I want to try and help him as far as I can).

Replies (6)

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By ireallyshouldknowthisbut
07th Aug 2012 13:47

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hmm, I would be wary of "helping out" and making a mess of it. Sometimes its better to say no.

In short this is going to be a big grind.

Quite frankly for £800 its probably not going to be worth overturning the determination. POA cant be due if that was the only assessment.

If you want to try and overturn the determination then you will need to work out what (if anything) is due and try under either by showing the letters never arrived (which might be valid if overseas for example at the time) or under the "equitable liability" rules you can. Its a very hard slog to win either way, hence by first comment.

 

2007/8 is in time for most things.

 

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By Helen Crowley
07th Aug 2012 14:30

"Equitable Liability" replaced by "Overpayment Relief"

Watch out though because "Equitable Liability" was replaced by "Overpayment Relief" and 2007/08 is now out of time. (You can only go back three years now so 2008/09 is the earliest year) Hopefully he or his previous accountant at least appealed against the Determination Notice? And the letter sent to HMRC with the 2007/08 details was sent before 5 April 2012? It is still worth trying to establish Residency status and income etc but your chances of success would appear slim at best. Hopefully others on here can put a more positive spin on it for you!

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Replying to lionofludesch:
By flurrymc
07th Aug 2012 15:12

Um, Helen.

 

Um! – Equitable liability has been replaced by special relief, see SACM 12215.

 

Overpayment relief replaces error or mistake.

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By ireallyshouldknowthisbut
07th Aug 2012 14:42

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well that's me out of date then. It is 4 years now not 5 you are right.

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By Helen Crowley
08th Aug 2012 09:32

Thanks flurrymc

Quite right flurrymc :-) (Although "Special Relief" is a form of "Overpayment Relief"! SACM12210 etc)

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By Anthony123
08th Aug 2012 09:54

Determination notice

You cannot appeal a determination notice.

 

If it were a closure notice at the end of an enquiry you could appeal that and could offer a late appeal.

 

I'd suggest you give the guy details from HMRC website on how to claim special relief and leave him to do it. He's unlikely to get it unless there are other much stronger aspects to his life story over last few years than you give here and he's unlikely to pay you if you don't get a result.

 

 

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