TAX FEATURE: HMRC's new compliance 'interventions' trials begin. By Nichola Ross Martin

An HMRC press release announced that these invasive trials commenced on 10 July 2006. This had already been noted on AccountingWEB by member Stewart Ryan, who reported that one of his clients had received a 'friendly' (not) telephone contact from HMRC following a change of partners in the business.

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Comments
richard.murphy's picture

Innocent until proven guilty

richard.murphy | | Permalink

As I say on my blog:

"I am all in favour of people paying the right amount of tax. I have little tolerance for anything else. But I’m going to add my voice to that of a number of accountants expressing concern about HM Revenue & Customs new ‘compliance interventions’."

And, as I add:

"this is a step in the wrong direction. There are better ways to improve the tax yield, relationships with professional advisers and taxpayers than this. I suggest that this experiment is dropped very quickly, but at the same time the old fashioned limited enquiry of an accountant that the Inspector knows and respects (which they would if they stayed in one place long enough to get to know who is, and who is not, likely to cause them problems) would be a lot more useful."

To read more see http://www.taxresearch.org.uk/Blog/2006/07/25/innocent-until-proven-guilty/

Richard Murphy
http://www.taxresearch.org.uk/blog/.

Intervention "risk" factors

Anonymous | | Permalink

According to letters received by two of my clients "Motor Dealers commonly make errors when they calculate the value of their closing stock"

They then refer them (and we're talking here about one small second hand car dealer and one small scale scrap dealer who trades a few cars) to the relevant section of the manuals "to find out how to deal with these items correctly for tax purposes".

As if! and that's before the minor problem that the Revenue do not seem to be aware of FRSSE but give all their advice in terms of multinationals (who noticed a similar error in their dates for UITF 40 - FRSSE only effective for periods of account beginning on or after 1 January 2005 not for all accounts ending after June 2005)

So far I am well unimpressed!

Human Rights Breach?

leon0001 | | Permalink

The intervention calls and letters on trial appear to provide HMRC with additional information which enables it to query self assessment returns properly submitted under the existing legislation. HMRC already has the right to open an enquiry within the relevant time limit and in accordance with the Code of Practice. It may decide whether or not to open the enquiry on the basis of information in the return. When such an enquiry has been closed, the determination is final.

This is a very important principle which gives certainty to the taxpayer concerning his or her liabilities.

The experimental "intervention" regime seeks to provide a more informal route for HMRC to query the information in the return, but there is not yet any corresponding legal or consensual framework to protect the taxpayer. HMRC may go through the intervention procedure, ask the taxpayer to file a repaired return and still subsequently open an enquiry within the time limits.

The experimental procedures could, therefore, intentionally or unintentionally disturb the existing balance of rights and responsibilities intended both to protect individual taxpayers and the public revenue.

It therefore follows that there may be a human rights breach if the taxpayer is inequitably disadvantaged by the intervention procedures as presently under test.

I therefore believe that agents are required to decline to respond to such interventions, indicating their concerns, until HMRC has been able to demonstrate that there are no circumstances in which their client could be unfairly disadvantaged by the intervention procedures presently on trial.

dahowlett's picture

Just say no?

dahowlett | | Permalink

Nichola:
Given:
1. The Tax Faculty have registered 'disappointment'at much of this
2. There is no test for competency in practice assurance visits
3. Readers continually and regularly complain about the bully boy tactics employed by HMRC
4. The lack of transparency around the selection process

that ICAEW should - at least for the health check type visits - advise members to 'just say no' in appropriate cases.

If clients are adamant everything is fine, then let HMRC waste time but don't charge for the time. Alternatively, if you must be rewarded for every second of time then get agreement HMRC will reimburse where the effort is wasted.

Advising practitioners to check their PII and client fee protection cover seems to be a defensive step at best, designed to protect practitioners rather than safeguard client rights.

What confidence does this convey to the general public and SME taxpayers in particular?

I am of the view there are some obvious things practitioners can do to overcome many of these problems but I doubt they'd be popular.

Interventions Register wiki

AnonymousUser | | Permalink

Taxation magazine has set up a 'wiki' for tax advisers to pool knowledge of these letters, at http://editthis.info/taxation_interventions_register/

A wiki is a set of web pages which anyone can easily edit. We have put pages for each letter's reference number containing the outline details from the sample letters already released by HMRC onto the wiki. If you have a copy of a real letter, please navigate to the appropriate page, click on the 'edit' tab and edit the page so that it has the full text.

Mike Truman
Editor, Taxation magazine

Intervention telephone calls

ronmorris23 | | Permalink

Unsolicited ' phone calls should be resisted at all times.
Con men are well versed in obtaining personal information from us. If HM Revenue, banks or any other institutions wish to talk to us then they should supply a password and user name which we recognise! The provision of your UTR or NI Number is not adequate proof.