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Operation Edgewood & Christopher Lunn - a game of cat & mouse

Operation Edgewood & Christopher Lunn - a game...

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HMRC has written to former clients of Christopher Lunn and Co threatening “criminal investigations” and raising settlements under section 29 of the Taxes Management Act 1970 if they do not provide a full disclosure.

AccountingWEB has been approached with one of the letters sent to ex-CL clients, which reads:

"In order for HMRC to consider your tax position I request that you provide me with a full written disclosure of all omissions and understatements of income gains together with details of incorrect claims for deductions, allowances and reliefs.”

HMRC has threatened it could pass these cases on to the criminal investigation team to identify potential irregularities into tax returns that may give rise to additional tax liabilities and penalty charges.

What is the Revenue doing with Operation Edgewood? The last time we heard about Edgewood was in May last year.

What have AccountingWEB members done to protect their clients?

Have other accountants arranged a settlement, resisted and challenged the request, and is anyone saying this is illegal?

Replies (7)

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By elansea
12th Feb 2013 14:23

Lunn
I have reached agreement with HMRC for all years under enquiry though no settlement yet as the terms are being offered nationally to provide fairness.
The clients are more than happy in the circumstances.

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By Oppco
12th Feb 2013 14:49

Elansea, what were the 'years under enquiry'? I cannot get HMRC to specify for the two cases I am dealing with. They are asking for 'disclosure of all omissions'.

 

 

 

 

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By Ted Numbers
14th Feb 2013 10:42

Lunn

You need to tread carefully. This is already a criminal investigation and HMRC already has the power to issue discovery assessments if there is deliberate understatement. No disclosures should be made without the protection of the CDF or similar guarantees of non prosecution. Believe me, there are people in jail as we speak, having coughed to tax fraud in these circumstances.

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By 1+1=3
14th Feb 2013 11:55

Premature?

There is a Judicial Review about the construct of these letters, with the oral application being made on 26th March. The gist is that HMRC have the powers to formlise any enquiries and so they should do so in this case. Currently the language is heavily COP9 orientated but with none of the protection. Great for HMRC where the onus (and cost) is on the tax payer but with none of the formal protection (or potentitaly avenues for complaint or redress). A very unsatisfactory arrangement.

If the JR succeeds then this will quash the letters and their requests. I wonder where that will leave those who have already done deals etc?

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By russellwebb
04th Nov 2013 11:54

Any advice?
I am one of the unfortunate Sole Traders that is currently wrapped in the investigation having employed CLAC in 2006/7/8. Following an extremely lengthy process HMRC Local Compliance for Small & Medium Enterprise based in Bootle in Liverpool are now demanding a 'without prejudice' £4745.64 in back payment from their projected short coming for those three years when I began trading. Is there any advice you can give me right now, or would be willing to give me? Plus, if you have time to point me any direction regarding independent advice on this, any action groups you know of set-up to collectively look into the bully-boy tactics I feel HMRC are using, then that would be much appreciated. And lastly, if you feel you could help on a more professional level and would prefer to offer paid advice, I have no issue with that. I await your advice with anticipation.

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By norstar
17th Dec 2014 13:12

No evidence supplied

A bit late coming to this but I've got one going on now. It relates to 2003.

HMRC are repeatedly referring to "evidence" in hand that shows understatements of income, therefore they can go back that far because it "must be deliberate", but they refuse to make anything available to my client.

I simply cannot see how it can be equitable that the prosecution refuses to disclose or air any evidence for the defence to comment on.

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By mabzden
13th Jan 2015 12:03

Frustrating

It's been a frustrating process over the last few years. If I lived my life all over again one thing I would change is to spend far less time (or none at all) doing Disclosures for ex-CLAC clients.

In my experience HMRC has got information about income and expenses from the client files seized from CLAC's offices. The story they've told me is they don't own these papers so can't show them to anyone. So they've made references to "information seen by HMRC" but haven't been willing to share hard copies of this information with either myself or the client.

That said, is this is a major issue in your case? The client must know (or be able to find out) what their income was, and I'm sure HMRC will provide the income declared for the relevant years from tax returns etc.

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