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HMRC - The Commissioners and The Law

Discussion with HMRC of Director's Tax Returns

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Summary so far:

I wrote to HMRC through my MP querying the fact that on the HMRC website it says Directors "must" submit a tax return. To cut a long story short they agree there is no obligation through TMA 1970. However they say they have powers vested in them by the Commissioners of HMRC to say this.

I just received a second letter with the extraordinary sentence "The Commissioners may do anything they think is necessary or expedient in connection of the exercise of their functions". Really? Like take me in for interrogation? I don't think so?!

So how do they decide what they are and aren't allowed to do. I am a CTA and was taught that HMRC had to follow tax law. Now apparantly they can just do what they like??!!

I have just had a quick look at Commissioners for Revenue and Customs Act 2005 which has this:

9 Ancillary powers (1) The Commissioners may do anything which they think— (a) necessary or expedient in connection with the exercise of their functions, or (b) incidental or conducive to the exercise of their functions. (2) This section is subject to section 35.

Section 35 doesn't seem relevant. 

So I suppose I need to go to the commisioners?

I have asked my MP but he doesnt care.

Anyone been down this road?

Cheers

Rob

Replies (18)

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By Tim Vane
08th Jun 2018 13:59

I'm in agreement with your MP.

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Replying to Tim Vane:
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By roblpm
08th Jun 2018 14:17

Tim Vane wrote:

I'm in agreement with your MP.

He didn't say anything!

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Replying to roblpm:
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By Tax Dragon
08th Jun 2018 14:21

That's the point.

What's yours?

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Replying to roblpm:
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By Mr_awol
11th Jun 2018 13:09

roblpm wrote:

Tim Vane wrote:

I'm in agreement with your MP.

He didn't say anything!

So how do you know he doesn't care if he didn't say anything? Maybe he does care, and he will respond in due course once he's attended to everything which outranks this matter in its importance (which could be a very long time IMHO)

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By Tax Dragon
08th Jun 2018 14:18

Why would we? Why have you?!

And calm down with the !!!??!!, yeah? You'll give yourself a heart attack.

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Replying to Tax Dragon:
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By roblpm
08th Jun 2018 14:20

Tax Dragon wrote:

Why would we? Why have you?!

And calm down with the !!!??!!, yeah? You'll give yourself a heart attack.

Very good point. I will relax. I just find it extraordinary that HMRC are basically quoting Commissioner Powers and saying basically they can do what they like. Whats the point of doing tax exams on the laws?

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Replying to Tax Dragon:
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By roblpm
08th Jun 2018 14:20

Tax Dragon wrote:

Why would we? Why have you?!

And calm down with the !!!??!!, yeah? You'll give yourself a heart attack.

Very good point. I will relax. I just find it extraordinary that HMRC are basically quoting Commissioner Powers and saying basically they can do what they like. Whats the point of doing tax exams on the laws?

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By Paul D Utherone
08th Jun 2018 14:34

We all know that the HMRC website is not correct by statute that "directors MUST submit a tax return", but HMRC have the power to require a return to be made, and to withdraw that requirement under TMA s8B

They have won penalty cases at FTT where a director has been required to make a return and failed to do so. This is either because the 'director requirement' has not been correctly addressed in the appeal and/or because the taxpayer issued with the notice has stuck their head in the sand and brought it on themselves.

There are a few cases where the 'director requirement' has been put properly and they have lost.

But at the end of the day you have to accept that:
- HMRC have the right to require a return from anyone.
- anyone so required can ask for the requirement to be withdrawn under s8B; but
- it is down to HMRC whether they agree to such a request

Members on here have been successful in getting returns withdrawn where one might expect that, based on HMRC's 'criteria for SA', the request would be refused.

Where that happens, HURRAH! If HMRC refuse to withdraw then you are a fool if you do not just get on and submit the return(s) by the due date.

So long as there is no liability for the year, that would have required a person to register for SA, there can be no question of a failure to notify penalty.

After all this time all one can do is try for the withdrawal, or suck it up and do the return, because if you don't then you stand little chance arguing failure to submit on time penalties at tribunal.

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Replying to Paul D Utherone:
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By roblpm
08th Jun 2018 15:07

Paul D Utherone wrote:

We all know that the HMRC website is not correct by statute that "directors MUST submit a tax return", but HMRC have the power to require a return to be made, and to withdraw that requirement under TMA s8B

They have won penalty cases at FTT where a director has been required to make a return and failed to do so. This is either because the 'director requirement' has not been correctly addressed in the appeal and/or because the taxpayer issued with the notice has stuck their head in the sand and brought it on themselves.

There are a few cases where the 'director requirement' has been put properly and they have lost.

But at the end of the day you have to accept that:
- HMRC have the right to require a return from anyone.
- anyone so required can ask for the requirement to be withdrawn under s8B; but
- it is down to HMRC whether they agree to such a request

Members on here have been successful in getting returns withdrawn where one might expect that, based on HMRC's 'criteria for SA', the request would be refused.

Where that happens, HURRAH! If HMRC refuse to withdraw then you are a fool if you do not just get on and submit the return(s) by the due date.

So long as there is no liability for the year, that would have required a person to register for SA, there can be no question of a failure to notify penalty.

After all this time all one can do is try for the withdrawal, or suck it up and do the return, because if you don't then you stand little chance arguing failure to submit on time penalties at tribunal.

Ok great summary.

But this doesn't answer the question as to how HMRC can state that a Director "must" submit a tax return. That is just not true! They have told me that the commissioners have told them that they can say that. I want to see how they have been told.

I understand that some may think this is unnecessarily pedantic but why should they be able to write whatever they like on their website and not make it clear.

Directors do not have to submit a tax return unless HMRC ask them to. (Or obviously they have income that they need to declare.)

So the website is factually wrong.

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Replying to roblpm:
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By Tax Dragon
08th Jun 2018 15:51

roblpm wrote:

So the website is factually wrong.

Do you contact your MP every time you spot an error on a website?
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Replying to roblpm:
By Paul D Utherone
08th Jun 2018 17:24

Well yes and no.

It may not be statutory, but it's what HMRC believe to be true, and is one of their criteria. So if HMRC require a director to make a return for any year, and will not withdraw under s8B, then yes, they must do so.

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By roblpm
08th Jun 2018 15:10

Directors should not be in the list.

They need to submit if there is taxable income like anyone else. Or if HMRC ask them to like anyone else.

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Replying to roblpm:
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By Tax Dragon
08th Jun 2018 15:52

I hope you feel better for venting in here, but it's not the worst mistake HMRC has made. Why so excitable?

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Replying to Tax Dragon:
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By roblpm
08th Jun 2018 16:17

Do you feel the need to criticise me every post?

I will stop posting.

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Replying to roblpm:
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By Tax Dragon
08th Jun 2018 17:33

I didn't feel I had criticised you at all. If anything, my comments just show my ignorance as I still have no idea what your situation is but it seems all the other respondents understand you completely.

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RLI
By lionofludesch
08th Jun 2018 15:54

There's been a bias towards the Crown's position as long as I can remember.

Losing Mallalieu v Drummond would've cost the Inland Revenue a fortune. It therefore had to be stamped on, whatever the rights and wrongs of the case.

Nothing new here. The Government lack integrity.

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Replying to fawltybasil2575:
By SteLacca
11th Jun 2018 13:20

I take offence at being described as "more senior" ;)

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By roblpm
07th Aug 2018 10:55

Well seems like a few letters can make a difference:

We consider which customers should complete a return on a continual basis as part of our
wider transformation agenda. We have no current plans to change the criteria. However, we
agree that the wording of our guidance on GOV.UK needs updating, and we plan to do this
when time and other priorities allow.

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