Hi all, as in the description, Ive a new client who has prepared own SA using estimates no records past 8 years. HMRC enquiry, officer looking at using BEM based on MOT. Client declared all mileage as business use, high mileage 70k pa.
Client now stating maybe around 40- 50% idle time. My question is does anyone have any other methods they use to assist clients with no records. I am concerned as client has changed mind now been explained how BEM works and not before despite HMRC officer having numerous meetings with client and labouring point. Client has learning difficulties.
Any thoughts would be appreciated.
Replies (60)
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Think about it.
If he does 70k per year that is a busy taxi driver.
What does idle time have to do with it?
Even if he only has £5000 per year tax to pay that's £40k add interest and penalties you could nearly double it.
If he owes that sort of cash you will not got paid.
It's an impossible position for you are you have no position to argue from it will be just a horse trade as to what tax dept will accept.
You could end up down COP9 route with a case like this with deliberate evasion.
Unless he has a big lump for you to get started do as said above and avoid it like the plague.
Client has learning difficulties
I'm appalled that some are advising you to avoid a client who, from what you say, very clearly needs urgent help.
You say that your "client has learning difficulties"? If so, he needs help not because of dishonesty, but because of inability to deal with his affairs.
Is this officially diagnosed, and do you have or could you get an expert second opinion if needed? If so then HMRC have legal obligations under the Equalities Act 2010 towards your client. If HMRC have failed to make reasonable adjustments (which in the case of someone with learning difficulties would involve ensuring that he had professional guidance in complying with his obligations) then they are in breach of the Equalities Act.
The following should give you a starting point.
http://www.hmrc.gov.uk/manuals/dmbmanual/dmbm585185.htm
Idle Time ?
Idle time, I don't understand. Are we talking about return-to-the-rank mileage ?
Is he private or public hire ? How does he get his customers ?
learning disabilities
I think I've developed a learning disability.
I just can't understand how someone can believe such a b*llocks story. "sorry guvnor, I straight plum forgot that not all my mileage was business. Can I pay no tax now?"
Where does this driver work? I must remember never to get a cab there.
HMRC seem to have handed you grounds for appeal.
When he suggested his cab was full all the time alarm bells regarding his ability to understand what he was being asked (learning difficulties) should have rung with HMRC. Apparently they failed to assess his mental capacity, contrary to their own published guidelines.
After all, every other cab in Britain spends around half it's time empty.
If HMRC failed to take into account the clients obvious lack of ability to fully understand what he was being asked that would, I suggest, give a very useful basis to refer any assessment or penalties to a tribunal.
EDIT.
cparker87 you have obviously had no experience of working with those with learning difficulties or mental issues. I suggest a little more knowledge before making scathing ill founded and frankly discriminatory comments. I spent 20 years working as FD for a group dealing with children with learning and behavioral problems.
On the other hand
When he said cab was occupied 100% of the time it may have set alarm bells ringing that this guy was trying it on.
I find it astonishing that anyone is able to reach such a definitive conclusion on the client's status without knowing the first thing about him. History has shown that 'facts' presented here are often not the most reliable.
Yet, based on nothing more than a statement that the client has "learning difficulties", someone is able to fully diagnose the client's mental capacity. Wow.
Impossible
When he said cab was occupied 100% of the time it may have set alarm bells ringing that this guy was trying it on.
No cab is occupied 100% of the time. Unless you're in the Big City, no one flags a cab down in the street. You get your fare at the rank, drive him to wherever he wants to go and drive back to the rank empty.
No U turn - still heading straight on
Did you miss this - or do you have learning difficulties:
When he said cab was occupied 100% of the time it may have set alarm bells ringing that this guy was trying it on.
defence lawyer
I think you've missed your calling in life G Turner. Your interpretation of this chap is creative.
What grounds were there to judge the client hadn't understood what is a very simple question? Let's remember this person has the ability to drive.
But the OP is saying that the client told HMRC something which he knew to be untrue (i.e. that he had no idle time) in the hope of reducing his tax liabilities (by obtaining a deduction for all his fuel costs).
Now that may have been unwise & something which most people would realise would never be believed, but it is lying.
IMHO lying has nothing to do with learning difficulties - but it may well have something to do with penalties.
RM
Ignorance
The OP states the client has learning difficulties, which covers a multitude of mental conditions.
A warning which HMRC themselves highlight in their own notes is QUOTE -
"In some cases customers may not disclose a mental health condition, but you may notice something in their behaviour that indicates that they are experiencing some form of distress. Some common indicators of a condition are that the customer may:
be telling you things that they believe to be true but in reality are extremely unlikely."
Perhaps it's time some people learnt from those of us who have extensive knowledge of working with the mentally impaired. After all, it is illegal to discriminate against them by omission or failure to take reasonable steps.
Rudeness by "professionals" says far more about them, than it does about their target.
On the contrary
Perhaps it's time some people learnt from those of us who have extensive knowledge of working with the mentally impaired.
Members here have a lot of experience in dealing with the mentally impaired. One individual in particular springs to mind.
Agreed
Members here have a lot of experience in dealing with the mentally impaired. One individual in particular springs to mind. Perhaps it's time some people learnt from those of us who have extensive knowledge of working with the mentally impaired.
For some reason the word 'pompous' keeps springing to mind.
What a load of sanctimonious twaddle.
Your assumption that somebody with learning difficulties has a mental health problem is very ill-conceived, and clearly you don't know what you are talking about, despite professing otherwise. Yes, people with learning disabilities can be more vulnerable to mental health problems but it is not, of itself, a mental illness. There is nothing in the OP that suggests this person has any mental health issues, or that he is anything more than a taxi driver who has been overclaiming mileage. Sure, making false statements could be a sign of a mental health condition. Or it could be that he is a liar who is trying to cheat on his taxes. Should we just assume that clients who tell porkies are mentally unfit?
And are you going to explain how you think he is being discriminated against?
I have clients with learning difficulties. I have a window cleaner with severe learning difficulties. Unlike the OP's client, mine are not lying bastards that try to evade taxes.
The OP's client has thought he was a clever Chris for some time. Despite learning difficulties, he also managed to complete his own tax return. Only when HMRC has caught up with him does he want the help of an accountant.
A client who thinks he is above the law, needs a lot of my time, and unlikely to pay me is not a client I want.
I run a business. Not a charity for tax evading parasites.
First thing to do with inadequate records
The first thing that I do when I find clients with inadequate records is get adequate records put in place.
This should enable the current earning capability / profits to be established as a credibility check against anything declared or said to be correct in the past.
Presumably the taxi has a taximeter, this should be a useful source of information to support current data recording.
Professional or Not
Professionals are paid to help people solve their problems. The key question for the professional is do they want to do the job/project offered or not and more importantly do the have the skills to do it. This should be established at the start and the instructions declined at the offset if the professional does not wish to act or des not have the skill.
If accepted the professional should follow the fundamental principles etc and get the job done. This will sometimes be an up and down rollercoaster but this is something that should be apparent before setting out on the journey.
Of course, there will always be extreme circumstances where the professional must resign whilst on the road but these will be few and far between.
As for getting paid, we tell clients at the outset our terms for cases like this. Payments on account by weekly direct debit and if they bounce one large payments on account up front are required.
Abusive "professionals"?
I note with interest the abusive comments by certain individuals. Quite clearly there is appalling ignorance and blatant and illegal discrimination disclosed by their comments. Learning difficulties ARE classified as a mental impairment by the law and indeed by HMRC themselves. Claims to the contrary made above are pure ignorance. Such ignorance of the law suggests that those making the comments are unfit to deal with the public Their professional body should (and will) be made aware of the disreputable opinions of their members. Copies of the comments will be forwarded to all professional bodies with a suggestion that they ensure that all members are instructed to comply with their legal obligations.
As regards the OP's question. I would suggest that he view this case as one which probably will not pay for itself, but, as one which it is his moral duty to pursue. The first step should be a frank discussion with the client, and obtaining permission to write to his GP to obtain confirmation of his learning difficulties and their impact on the client's ability to deal with often complex requirements to comply with and fully understand tax law.
Possibly there is a social worker of some sort involved, if so their input would also be of value.
The client's recorded behavior already constitutes a warning of potential mental health difficulties as defined by HMRC's own publications, so serious questions must be asked about their failure to flag up the potential health difficulties.
Certainly it already provides a basis for appeal of any liability they assess.
As regards any allegation that the cab is full 100% of the time is ridiculous and would make HMRC appear incredibly stupid.
Stupid?
As regards any allegation that the cab is full 100% of the time is ridiculous and would make HMRC appear incredibly stupid.
Yes it would - if HMRC had accepted the clam. Which they quite sensibly didn't. I would say that it is the person making the claim, hoping that HMRC would believe them, that is the stupid one.
I'll take this opportunity to say goodbye.
U turn
As regards any allegation that the cab is full 100% of the time is ridiculous and would make HMRC appear incredibly stupid.
Yes it would - if HMRC had accepted the clam. Which they quite sensibly didn't. I would say that it is the person making the claim, hoping that HMRC would believe them, that is the stupid one.
I'll take this opportunity to say goodbye.
So now you agree that alarm bells should have rung at HMRC. Make your mind up.
They have
As regards any allegation that the cab is full 100% of the time is ridiculous and would make HMRC appear incredibly stupid.
Yes it would - if HMRC had accepted the clam. Which they quite sensibly didn't. I would say that it is the person making the claim, hoping that HMRC would believe them, that is the stupid one.
I'll take this opportunity to say goodbye.
So now you agree that alarm bells should have rung at HMRC. Make your mind up.
clearly rung, hence the situation. Or did you miss that part in the midst of your little tantrum?
lol
.... Such ignorance of the law suggests that those making the comments are unfit to deal with the public Their professional body should (and will) be made aware of the disreputable opinions of their members. Copies of the comments will be forwarded to all professional bodies with a suggestion that they ensure that all members are instructed to comply with their legal obligations.
Sounds like a threat .... bring it on. :)
ps. Exactly who are you going to report, and to which professional body?
FYI
Sounds like a threat .... bring it on. :)
ps. Exactly who are you going to report, and to which professional body?
A report of the ignorance displayed is being sent to all the professional bodies. Such appalling ignorance by "professionals" is unacceptable. The report is being sent by the national charity I now work with.
In the spirit of openess
Sounds like a threat .... bring it on. :)
ps. Exactly who are you going to report, and to which professional body?
A report of the ignorance displayed is being sent to all the professional bodies. Such appalling ignorance by "professionals" is unacceptable. The report is being sent by the national charity I now work with.
In the spirit of openness would you kindly advise the name of the charity? There is a general precept that individuals ought to know the identity of their accuser, natural justice.
DJKL
In the spirit of openness would you kindly advise the name of the charity? There is a general precept that individuals ought to know the identity of their accuser, natural justice.
I look forward to you posting your full name and contact details then.
So be it
In the spirit of openness would you kindly advise the name of the charity? There is a general precept that individuals ought to know the identity of their accuser, natural justice.
I look forward to you posting your full name and contact details then.
Dear Sir or Madam
My first thought is why should I, that was my first post on the thread, I had made no previous comment-I am not one of the ones to be reported, my observation is as a non involved observer.
To review the facts, you are the one brandishing your "expert" knowledge of disability and mental health issues and who introduced to the discussion the charity that is making the complaints to all the professional bodies, accordingly I think the onus is on you to disclose which charity you have persuaded, without full review by them of all pertinent matters , to proceed in such a fashion. I presume they did not have time between your posts to convene a meeting at the charity to consider their appropriate action- possibly slightly remiss of the trustees .I am a trustee of a charity (you can check the OSCR if you want) , we would certainly not initiate such an action prior to full review.
However whilst I am not prepared to post my contact details on an open forum you can have my name, I have no need to hide my identity and am easy to find as not that common a surname in the UK.
Please now reciprocate.
Yours faithfully
Donald J K Liddiard
Unjustified assumptions
You are reading an incredible amount of detail into what is essentially a single sentence. Learning difficulties is a broad spectrum. Bear in mind this is someone that has both been granted a driving licence and has presumably obtained a taxi driver licence as well. This is therefore presumably not someone that is completely incapable of operating in society without help, which is practically how you are painting them.
As for this sentence
It is the client that claimed they had no idle time, not HMRC. HMRC are, not unreasonably, contesting this claim. This is also something that anyone with any mental capacity should know was wrong. There is a world of difference between not being capable of handling all your tax affairs and not knowing the difference between the truth and a lie. As regards any allegation that the cab is full 100% of the time is ridiculous and would make HMRC appear incredibly stupid.
So you know more than HMRC?
There is a world of difference between not being capable of handling all your tax affairs and not knowing the difference between the truth and a lie.
And yet HMRC's own guidelines specifically state that one is a clear indication of the other.
Not all mental illnesses are the same
Please show where in HMRC's own guidelines it says that not being capable of handling your tax affairs ALWAYS means that a taxpayer cannot tell truth from a lie. For that matter, apart from a reference to psychotic disorders, I could not find that at all in a quick scan of the link you posted.There is a world of difference between not being capable of handling all your tax affairs and not knowing the difference between the truth and a lie.And yet HMRC's own guidelines specifically state that one is a clear indication of the other.
Yes, there are mental conditions that render sufferers incapable of making the distinction. I cannot help thinking anyone suffering from such issues would not be capable of holding a driving or taxi licence. There are a much greater variety of mental conditions which do not. You have no solid evidence of what conditions the client may or may not suffer from.
You accuse others of being insensitive to the issue. I cannot help thinking that, by equating any sort of learning difficulties with complete incapability to distinguish fantasy from reality it is you that are doing the mentally disabled a huge disservice. Having suffered myself, I cannot express how much harder it is when everyone assumes that no overt signs of what they think of "madness" must mean you are lying. You are adding to this misconception with your posts.
It seems that the client is fit to drive a taxi, can calculate the fair for a ride, accept payment and give correct change, understand and pay all the taxi driver related expenses, insurance and fees etc. and his learning difficulties do not affect any of these.
Same as his learning difficulties did not affect his ability to understand, prepare and file his own TRs for the last 6 years and enjoy the “benefit” of paying less tax than he should because of over claiming the expenses.
And only when HMRC have opened the enquiry his learning difficulties are coming in to play as a reasonable excuse for him trying to evade paying tax? Do not want to sound cynical but that sounds dodgy and immoral to me.
I still believe that the OP has a good chance to succeed in using learning difficulties excuse though. Would it be morally correct? That`s for OP to decide.
Gary, get your head out of your [***].
Report members to their professional body for these comments? Many of us are anonymous. Please let me know how you intend on complaining?
We have someone that has evaded taxes. They haven’t used an accountant to submit their tax returns – presumably to aid their tax evasion. Only when it hits the fan do they want the help of an accountant.
Learning difficulties aside (and at this stage, we do not know the severity), this is not the type of client many practitioners want to represent.
This may come as a shock to you Gary, but accountants are free to pick who they represent. Just because someone has a disability, it doesn’t mean that an accountant has a legal obligation to represent them.
To the OP. I have found taxi drivers in the main to be nothing but trouble and I now avoid them as clients.
Parents
Well, at least he didn't threaten to tell our Mums that we've been bad boys and girls.
I would imagine that your parents would be mortified that they had brought up such an ignorant little boy.
Jumping to incorrect conclusions.
As Stepurnan states learning disabilities is very broad term covering a while spectrum of conditions.
I have worked in healthcare and fully aware of the issues those with LD can suffer and the effects they can have on that individuals life.
In this case though the person concerned can manage to navigate and drive 70,000 miles per year around one of the busiest road networks in the world, do this succesfully collect payment for what he does, pass his hackney licence, etc etc. This would suggest to me that he is at the very bottom end of the scale for those described as suffering from LD.
I had a client who was injured several years ago, which does not effect anything he does and he goes about his business without any issues, until he comes under any pressure from authority figures and then his past condition seems to flare up.
I suspect your client is the same and his condition is exaggerated to get pity from HMRC and get them to back off.
Boy who cried wold spings to mind.
As already stated I would not go near this unless I had a large POA sitting in my bank account as it is likely a hornets nest to sort out, and even if Harvey Spector was representing the client he is looking at a very large tax payment he probably has no way of paying.
Post Traumatic Stress
I had a client who was injured several years ago, which does not effect anything he does and he goes about his business without any issues, until he comes under any pressure from authority figures and then his past condition seems to flare up.
Never heard of PTSD?
Yes
I had a client who was injured several years ago, which does not effect anything he does and he goes about his business without any issues, until he comes under any pressure from authority figures and then his past condition seems to flare up.
Never heard of PTSD?
I've also experienced quite a few trolls on here. Then again, maybe it is the same troll with new ID's?
I actually live in the real world.
I had a client who was injured several years ago, which does not effect anything he does and he goes about his business without any issues, until he comes under any pressure from authority figures and then his past condition seems to flare up.
Never heard of PTSD?
Yes I am fully aware of PTSD, but the fact the guy started p*ssing himself laughing after the meeting stating, did you see them back off when I mentioned
the old injury indicted that it was not PTSD but just someone trying it on.
In the same way that HMRC dont just take issue with fiddlers of an ethnic origin, they tend to mutually dislike any fiddler regardless of the colour of their skin.
back to the question
1. I would get £300 up front to [***] the situation
I would do as follow:
1. Look at what is declared
2. Assume with no records other than mileage you will agree something in the published ranges HMRC give for taxis, taking into account his circumstance. Work out how stuffed he is.
3. Assess his assets
4. If assets are decent (eg own home) he need to deal with this properly, but will probably end up with a charge over them if its a huge sum, your job is to get this down
5. If assets are rented house, car on a lease etc, credits cards on red, bankruptcy might be the best plan.
That's what I would do way before even engaging in debates with HMRC.
I just remembered. Sift staff will be away for Easter shortly.
Gary, when did you join the site again?
The tax issue here is that HMRC suspect that turnover & profits have been significantly understated on past tax returns.
We are told that the taxi driver has prepared & submitted his own tax returns for many years.
So either he is not incapable of dealing with his financial affairs or he is incapable of dealing with his financial affairs but does not himself realise this (& this has persisted for years).
He has apparently been interviewed by HMRC several times & has been adamant in those interviews that 100% of his mileage is with paying passengers in the cab.
Now the accountant has explained the implications of that (for his turnover, profits & tax) he has changed his mind.
Looking at this in context, does it appear likely that these problems have arisen from (i) mental incapacity of the taxi driver, or (ii) the taxi driver knowingly misleading HMRC in what he (incorrectly) believed would be his own financial interests?
RM
Learning difficulties are not learning disabilities or mental health issues. Learning difficulties are things like dyslexia and dyspraxia, not autism, ADHD, Down's Syndrome or anything like that and anyone who's inferring anything like that from the simple statement "learning difficulties" is clearly just spoiling for a fight.
Spoiling for a fight?
Learning difficulties are not learning disabilities or mental health issues. Learning difficulties are things like dyslexia and dyspraxia, not autism, ADHD, Down's Syndrome or anything like that and anyone who's inferring anything like that from the simple statement "learning difficulties" is clearly just spoiling for a fight.
On the internet? Such a thing has ever happened!