Working with Tax Agents: The final countdown
Simon Norris, head of review for HMRC’s Powers’ team tells AccountingWEB why now is the time for agents to get their voices heard.
Continued...
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Whats good for the goose.............
I wonder if we can have exactly the same standards and penalties imposed on incompetent tax officers? No? Thought not.
Highly dangerous
It is a shame that so few appear to have bothered to read this article yet, but given the timing I can see why.
Hopefully some of those who have will have seen my article in January's Tax Adviser magazine and Robert Maas's recent article in Taxation magazine. We are completely opposed to HMRC's proposals which are rather more onerous than you would realise from just reading Simon's piece above.
HMRC is proposing new system whereby it can levy incredibly high penalties on agents - up to £50,000. If HMRC accuses an agent of fraud at the moment, it has to obtain proof to a criminal standard. HMRC has existing powers which enable it to do this. However, it has decided that this is too difficult and so it wants a whole new system. Under HMRC's new system, things are much easier for it, and of course, it does not have to worry about a fair trial any more. Once you have been accused of fraud (not convicted) it wants to be able to access all your client files, and presumably your business and personal ones too. Having destroyed your practice, trampled on client confidentiality and your Human Rights it can then fine you too.
What if you were innocent, what protection do you have? None. HMRC intend to make it impossible for you to attend the hearing to defend yourself and so you will not be able to prevent the destruction of your practice. Of course afterwards it will be just too late.
Now you probably think that fraud is fraud, but in this context HMRC has given it a new meaning, it means that if you do something to help a client save tax, and HMRC disagrees with your approach it could be counted as fraud, after all you did what you did deliberately. There are two sides to every story and you cannot make your case unless you are given a fair trial. HMRC is trying to deny you that right.
Finally, the intention is to apply this widely, very widely so an agent will be anyone who helps out a company in its tax and financial affairs. That means accountants, bookkeepers, lawyers, valuers.
Please respond to this consultation, if you have not got time, then drop me a line and I'll add your comments to mine. I am also drafting a response on behalf of the ATT and as you can guess starting to lobby against the proposals.
Contact me: nicki@rossmartin.co.uk
Human Rights Act
NRM - "What if you were innocent, what protection do you have?"
Welcome to Guantanamo Bay !
Posted by mikewhit on Fri, 05/02/2010 - 13:23
In theory the Human Right Act as the proposals breach several Articles.
However, someone is going to need a small fortune to fund such a challenge as it is likely to be appealed all the way by HMRC.
Working Together?
Seems to me that we can take one of 3 approaches, 1. do nothing, 2. go in guns blazing or 3. attempt to find common ground and discuss/negotiate.
Why I'm surprised I don't know, maybe I just live in hope, but it seems the vast (and I mean VAST) majority of us took option number 1 in the first consultation. I had to read Annex A of the results PDF a couple of times but there it is; just over 30 representative bodies/orgs and 29, yes 29, individuals bothered to make a written response.
I know I shouldn't generalise but given the responses on AcWeb back in the summer and from the tone of responses above, I'm guessing that perhaps 25 of the 29 went for approach number 2 on the first consultation.
Looks like we reap what what others sow for us or starve.
The timing is questionable.
Most of us are frazzled after January, the consultation closes in a couple of weeks, and then HMRC decides to give us some draft rules (published this week, see its website, I dare not give a direct link as Big Brother also affects Aweb: police keep changing my postings, so sorry about that).
Having read the draft rules, I note that HMRC staff will fit the bill as "Tax agents" and so if they cause a "tax loss" whatever that really means then they will be subject to penalties too. That at least is something, although, none of the penalties seem to be compatible with Article 6 HRA.
What did Dave Harnett say? "Tax Transparency and Lack of Trust? Yes, I think that was it.
Agent Fraud
Its amazing where HMRC get these figures from. Does anybody out there know or even have an inkling.
So, it would appear that instead of having a go at the tax payer HMRC will be having a go at agents. I wonder if that includes bookkeepers who are registered with Customs and Excise under ML rules.
I presume the next step is for tax avoidance or anything else HMRC don't like to be branded as malpractice.
Best HMRC just dish out pocket money to all and have done with it.