21st Feb 2022

HMRC reportedly demand £297K from an accountant!

£297k relates to tax and VAT on a leisure complex in a holiday let business

According to various newspaper reports, HMRC are demanding £297k from accountant Graham Wildin.

This is on the back of accountant/tax advisor Simon Dolan not including a £320k dividend on his personal tax return (non resident/split year).

This is also on the back of HMRC losing various IR35 cases.

If accountants and HMRC are getting their own personal tax returns/enquiries wrong, are tax rules just way too complicated now?

Replies (7)

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By David Ex

21st Feb 2022 16:15

GR wrote:

… are tax rules just way too complicated now?

Err, no. The Wildin case was discussed on here last week.

Thanks (2)

Replying to David Ex:

By DJKL

21st Feb 2022 16:21

Yes, the Wilin case covered building a leisure enterprise in his back garden, claiming CAs etc re same and the question of whether there was actually a business or not then being argued. He lost.

Thanks (2)

By rmillaree

21st Feb 2022 16:27

"This is on the back of accountant/tax advisor Simon Dolan not including a £320k dividend on his personal tax return (non resident/split year)."

well whose fault was that ??- the accountant admitted he took no tax advise and didnt check his return - its even matter of fact dividend was taken before he left the country. Can we blame anyone else if he just "presumed" it wasnt taxable as appears to be the case.

https://www.accountingweb.co.uk/tax/personal-tax/accountants-mistake-not...
Out of date knowledge
Dolan is a qualified accountant, but has not practised since 1997. Although he knew the tax residency rules in force prior to April 2013 he was not aware of the SRT rules, which were introduced from 6 April 2013 and so were applicable in his 2013/14 return.

He did not check his 2013/14 return, arguing that he expected his advisors would do it and that the return “went in last minute”. He failed to obtain up-to-date
professional tax advice before submitting the return.

excuse given - lol
HMRC was wrong to say that the inaccuracy was deliberate. It was entirely reasonable that Dolan made the simplest of errors, simply not staying up to date with new legislation in the most hectic period of his life. At worst the error was careless, but Dolan’s behaviour amounted to a mistake despite taking reasonable care such that no penalty should be due.

note confirmed he was in uk when he received dividend - so the clue was there
This also meant that Dolan’s dividend income should have been subject to UK income tax, as it had been received prior to his departure from the UK in July 2013.

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Replying to rmillaree:

By More unearned luck

21st Feb 2022 17:16

Dolan echoes Hargreaves. Mr H omitted a v big cap gain from his return on the ground that he was non-res. Then the SC gave its judgment in Gaines-Cooper, so instead he relied on HMRC's assessment being stale. Then the SC gave its judgment in Tooth leaving him with the defences of sufficient disclosure (it wasn't) and a lack of carelessness on his & PWC's part. But he was held to be careless as he had not checked with PWC that their advice hadn't become out of date. PWC were probably careless but there was no express finding to that effect and it didn't matter anyway.

Thanks (1)

Replying to More unearned luck:

By Justin Bryant

21st Feb 2022 17:58

Hargreaves UT is yet another recent high profile tax story reported here with the papers playing catch-up:

https://www.accountingweb.co.uk/any-answers/how-to-avoid-ps84m-tax-whils...

BTW, the UT (rightly) found the FTT did not properly join the dots re taxpayer negligence, so left that to one side.

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Replying to Justin Bryant:

By More unearned luck

21st Feb 2022 19:48

My reading is that the unjoined dots related to the agent's carelessness, but Mr H was done for by his own carelessness and by inadequate disclosure.