Life is tough on the front line of accountancy. For more than five years, our intrepid correspondent has been bringing us news and views from a typical West Country practice.
A tale of two taxpayers
I used to think "Time To Pay" arrangements with HMRC were a thing of the past. Now I'm not so sure.
Two clients contacted HMRC last week to try to get time to pay, only one succeeded.
Client 1 - male, sole director/shareholder of a successful company, personal taxable income from salary, benefits and dividends plus other investments - over £150,000. Dividends are covered several times over by profits after tax. He was caught unawares by the ridiculous P11D benefit from buying a BMW M5 in May 2010 without asking us for advice, and found himself a bit short of cash. He was in Spain playing golf at the end of January so he only phoned HMRC in mid-February when he received the tax reminder. He was hoping to spread the 31/1/12 payment over three months starting at the end of February.
Client 2 - female, over 65, runs successful small business with fluctuating profits. 2009-10 profits were modest, 2010-11 were double so she was hit with a big balancing payment plus much higher payments on account. She also left it until mid-Feb to contact HMRC. She has a big sale coming up in early March so needed until then to settle the liability in full.
And the outcome? Client 1 got time to pay as requested, Client 2 spoke to a very unhelpful lady at HMRC and was told, effectively, to get lost and borrow the money from her bank (which she did).
Fair and reasonable? I'll let readers decide.