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HMRC: Citizens Advice Bureau could cost you tax penalties

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4th Sep 2008
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Tax editor, Nichola Ross Martin writes: The next time you phone up your local Citizens Advice Bureau (CAB) for advice about your tax problems, be warned, you might land yourself with tax penalties, according to HM Revenue and Customs.

Its strange but true, it's now your duty to vet your volunteer advisor to make sure that he or she is trained and competent in the relevant area of taxation. Fail to make this basic check, and even if the advice metered out to you by the charity is wrong, you will nevertheless still be liable for a tax penalty.

This ludicrous state of affairs arises from HMRC’s new tax penalty system which is geared to taxpayer ‘behaviours’. We must all take “reasonable care” in dealing with our taxes, and this includes somehow working out if other people can work out a tax system that we clearly can’t.

The lunatics have taken over…

According to paragraph CH84540 of HMRC’s Compliance Handbook “ Where a person approaches a general advice organisation such as Citizens Advice Bureau (CAB), they should check that the individual adviser does have knowledge of the particular subject.” Sadly for taxpayers who have navigated as far as the handbook, it does not explain how one should make this check, whether this means wading through CVs, weighing up qualifications, perhaps looking at testimonials from other satisfied ‘custoimers’. HMRC it seems, will not be drawn on what constitutes a properly qualified advisor.

Now, aside from the fact the writer of the handbook seems concerned about the quality of advice metered out by the CAB, and, one assumes similar charities too. There is no going back on the fact that HMRC is actually admitting that the British tax system might be too much even for the nation's favourite advisory service. Now there’s a thing, tax is too taxing, even for the CAB!

Rather smugly, I think, the manual then goes on to say “If a person approaches us (HMRC) for advice, they are entitled…to expect that our advice will be correct…”

Whether such advice will be correct in practice is another matter, but at least you won't get fined.

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By User deleted
08th Sep 2008 16:06

But.......
it doesn't help the poor taxpayer who,if phoning the CAB, probably can't afford a proper advisor. He will get all the normal demands and his only recourse will be to sue after the event. Perhaps the CAB will be able to recommend a good solicitor too!

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By lawmaniz
08th Sep 2008 13:23

Careless talk costs money.
No problem here, boys and girls. A person acting in a voluntary capacity who gives wrong advice to another would incur liability for a negligent mis-statement at common law: Hedley Byrne & Co Ltd v Heller & Partners (1964) AC 465, House of Lords. And the voluntary organisation or employer would be vicariously liable (e.g. CAB; ACAS; Business Link.)

A person who gives wrong advice to another in a contractual relationship would incur liability under the Misrepresentation Act 1967.

Remember that the former can come into play if an accountant gives an innocent but wrong answer to a casual question by a person at a social or quasi-social gathering (Chaudry v Prabhakar (1989) 1 WLR 29, Court of Appeal) so (i) watch what you say and (ii) keep your professional indemnity insurance up to date.

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