New compliance interventions ' The debate. By Rebecca Bennyworth and Nichola Ross Martin
You might also be interested in
Replies (8)
Please login or register to join the discussion.
Wind Power!
The outside air is full of potential energy that if captured can turn a lot of wind into useful electricity. The problem is, its just too costly and erratic to capture and can only be a small part of a nations energy requirements.
And so it is with Treasury revenues, the potential is enormous for some streams of income. You can spend a lot of time and effort chasing the wind to have very little return on expenditure.
Regrettably, we are not privy to just how much its costing taxpayers for HMRC to chase phantoms. So who are the bright sparks at the Treasury who have convinced our gullible MP's that such things are possible?
Worrying
I personally find this worrying. I said before that I saw no evidence of practitioners fighting the clients' corner. Clearly the consultation process has been weak.
As a profession, surely 'we' have to ask why and propose sensible policies that would avoid the inevitable hand wringing that will emerge.
It's all too little and too late. Rebecca may be right about 'us and them' but there are ways to overcome the current hiatus.
a nal
I do think Alastair's suspicions are correct.
Nicola, sorry to sound a bit sad/[***] etc., but I think that the verb you were looking for is "mete" not "meter". Meter is the US (yuk) spelling of metre, however metre is not a verb.
I should like to know ...
... if a taxpayer who has received an enabling letter in one year subsequently comes under an enquiry in a subsequent year the conclusion of which gives rise to an adjustment, does the fact that an enabling letter was issued to him in the previous year give rise to a potential restriction of penalty mitigation for the year under enquiry?
And again, if that adjustment to the later year is sufficient to justfy reopening the previous year (in respect of which the enabling letter was originally sent), does the earlier issue of the enabling letter potentially restrict the mitigation of penalties for that (earlier) year, given that no repair to that earlier return has been filed in response to the enabling letter?
I can foresee HMRC attempting to argue that where a taxpayer has been placed on specific notice, and fails to act on that notice, then the degree of culpability in respect of subsequent errors (or earlier errors not repaired) is augmented and therefore more "severe".
I do hope I am wrong
but it strikes me that HMRCs attitude to agents is that they are part of the problem rather than part of the solution. And it further strikes me that this attitude has become more prevalent quite recently.
I am sure the CIOTs response was considered, and I am sure they took into account its likely impact before they released it. It would be worrying if the experts were not able to provide constructive criticism for fear of reprisal.
We had one of these letters ...
... for a taxpayer who had a significant drop in income for 2004-05. The reason for the drop was identified and fully documented in the white space. It did not stop the issue of the enabling letter (of course the drop in income might not have been the reason for the letter, but I would bet that it was).
So this year, when the income returns to normal, I am considering white-spacing a comment that the increase in declared income has arisen not as a result of the enabling letter but rather as a result of making more money. I would not want the case to be recorded as a statistical justification for the enabling letter. Not that the comment would do any good, of course.
Re. Clint's comment
Bearing in mind that the parameters used by HMRC to mitigate penalties are set internally, there is every reason to suppose that any compliance issue discovered during an enquiry following the issue of one of these intervention letters in which the “customer” has been asked to review a relevant point will invite retribution in the form of lower mitigation..
I would not be surprised if HMRC will do some form of statistical survey to check on the effect of these letters.
For example it would be pretty easy to check whether items such as private use adjustments had increased in the SA return following the issue of a relevant letter on receipt of the next completed SA return.
Also it would not surprise me to learn that “the computer” will pick out a statistically significant sample of taxpayers who have received such letters for a full enquiry in due course to see whether their compliance is better o worse than some previously defined average.
To co-operate or not?
My firm has received enquiries which are out of time under s9A, but apparently in time for these alternative intervention enquiries! To use AIEs to streamline administration is one thing. We would support that. But to (attempt to) use it to drive a coach and horses through statutory enquiry deadlines clearly imposed by Parliament is quite another thing. And, in my view, unacceptable. So we are not co-operating with the pilot scheme.