We have a client, we act for the contractor and most of the subcontractors. A lot of the Subcontractors are due refunds because they work for around £10 per hour.
We have resolved most of the issues with HMRC for most of our clients (although we have had some battles) but we have this one case where HMRC appear to be grossly over-stepping their powers and I have no idea what to do about it, other than to complain to the very people who are disregarding the law.
We filed four years of Returns showing a total refund of about £4k (client was working with our contractor company for about one year out of the four).
Cut a long story short. Without any form of enquiry, the compliance office has basically removed our Returns and the associated refund claims all of which can be backed up. (Most of the information on the earlier returns has been ascertained from the client’s personal tax account).
HMRC have written to request identity (fair enough, although given they have his bank details and his address they must know his identity). But at this stage can HMRC just disregard the client’s self-assessment returns and amend all to nil. They basically issued a letter and reduced all the returns to nil on the same day. Surely, we have 28 days to reply?
What happened to self-assessment and S9A enquiries?
We can step away from the moral question that someone who earns around £15k per year should have £4k taken off them without any recourse.
All correspondence is going to my client nothing is being sent to our firm as Agents (probably because they have had to back down on 4 or 5 other cases).
What should my firms next course of action be? I really feel that HMRC can do what they like and there is no where to appeal to.
If I was a client and took £4k off the Revenue there would be penalties and interest. How is that HMRC can just take a clients refund with impunity?