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So, come on. Who voted for this bunch of clowns? Come on..surely with this and the dividend tax you must realise that the government is no friend of small business. Ed Milibands 1% increase for large companies in CT rates and business rate relief is looking pretty good now huh.
Big Brother
is now not just looking at you but is going to be dipping into your pocket just like a thief!
what the Dickens!!!
Just finished re-reading Olive Twist and could not help but notice that there are some disturbing parallels between this Chancellor and The Artful Dodger. The Statutory Instrument however limits the Territorial Extent of its application to England, Wales and Northern Ireland. Could this result in a stampede of bank accounts across the Scottish border?
Unreliable HMRC
The real problems will arise when HMRC and/or the banks think that a bank account belongs to the recalcitrant taxpayer but it actually belongs to someone else, perhaps with a similar name. The first that the innocent person will know about this is when they discover their account has been frozen. I am afraid that HMRC in its present state cannot be relied on not to make such mistakes.
They are already in chaos
The real problems will arise when HMRC and/or the banks think that a bank account belongs to the recalcitrant taxpayer but it actually belongs to someone else, perhaps with a similar name. The first that the innocent person will know about this is when they discover their account has been frozen. I am afraid that HMRC in its present state cannot be relied on not to make such mistakes.
and it is going to end up, if they carry out this, millions of pounds compensation claims to be found out of taxpayer's funds. Literally they couldn't really have thought this one out.
Is there anything in the legislation about compensation for the taxpayer if HMRC get it wrong?
Not Thought Through.
HMRC's recent history shows that the potential for errors here is enormous. Quite apart from the cost of any compensation there will be equally burdensome additional costs to the tax payer of HMRC staff working to address claims and remedy errors. The sort of thinking that has resulted in bringing this nonsense forward belongs to another more autocratic age.
All sorts can and will go wrong!
The sheer volume and breadth of HMRC blunders is staggering. I was recently told "Call back in August" when asking when I might be able to discuss a letter I sent protesting £300 of wholly unjustified fines. That letter was sent on April 18th and HMRC has yet to open it.
My last tax enquiry ended in August 2014. It had no basis whatsoever in tax law, brought by a complete ignoramous who had not the faintest clue about the section of the VAT Act to which it related. I know this because I rang her up to find out what she knew, and had to read out the section THREE times before it even began to dawn on her.
There will be howlers with this new law. WE all know there will be, as ever HMRC are in denial. The worst thing, of course, is that once they have unjustly snatched your money they will dream up all sorts of ridiculous, drawn-out processes to get it back, just like CIS for limited companies.
And what will happen where the taxpayer goes bust?
As HMRC is no longer a preferential creditor, will they pay back any amount in excess of their entitlement?
S.
Dishonesty
Dishonest to promise that there will be controls in place, without then actually make any of those controls a requirement. In other words - it's not going to happen.
Shockingly scary...
As said already, the amount of errors that already occur makes this wholly, necessarily and exclusively unworkable. Exactly - just who did think this up on a boring day somewhere in a grey office...
What makes it worse is that the elected government of the day has gone along with it. Shows how out of touch they really are.
Mattress, gold, bitcoin?
Since any Joe Bloggs can have HMRC seize money from his account by mistake, banks are no longer a safe place to keep our money - if they ever were. Much better to keep cash under mattress. You don't even lose much interest these days. Possibly today even better to keep it as gold bars or sovereigns (very cheap now!) Another option is bitcoin. I don't think HMRC have yet worked out how to steal bitcoins !
If ever there were a case for keeping most bank accounts outside the UK this is it.
Clearly the won't pays will find methods to keep all but day to day monies out of UK bank accounts
A sore subject
Extract from a letter sent to Advantis today -
"This morning I received your letter dated 16 July 2015, threatening me with legal action & court costs. It also says "You appear to be ignoring this matter in the hope that it will go away" I find this offensive in the extreme as it is your company which is completely ignoring my payment and correspondence. You are employing totally unacceptable bullying tactics.
I sent a cheque numbered 3312, first class, on 26 May. This cleared my bank account on 8 June. I sent you an email advising you of my actions on 12 June. This was acknowledged the same day. I then received a further email from you dated 18 June telling me that you could not correspond by email as it was insecure - fair enough. In that email you said that you had issued a written response, via post. If you did I never received it. I did however, receive another debt collection letter from you, which I did ignore. You are so incompetent that I assumed the left hand did not know what the right was doing.
I enclose copies of all emails for your information.
If you persist in your approach I reserve the right to produce this correspondence in my defence and will seek costs against you."
The debt was £214......and settled before Advantis became involved.......
.
Offshore ?
The ONLY way to be (reasonably) sure they don't get money they're not entitled to is to set up a different account at a different bank purely to hold tax that is due - and nothing more. And this is the only account that you ever let them know about. Otherwise keep all your money in a Scottish bank - or offshore. It's not tax evasion or even avoidance to use an Isle of Man account simply to protect your money from HMRC errors.
Can't hide your bank accounts
The ONLY way to be (reasonably) sure they don't get money they're not entitled to is to set up a different account at a different bank purely to hold tax that is due - and nothing more. And this is the only account that you ever let them know about.
I think they can very easily find out which UK bank accounts you have.
Real pay packets?
The ONLY way to be (reasonably) sure they don't get money they're not entitled to is to set up a different account at a different bank purely to hold tax that is due - and nothing more. And this is the only account that you ever let them know about.
I think they can very easily find out which UK bank accounts you have.
That's why better offshore, or not use a bank at all. I remember my first pay packets were just that. Little brown envelopes stuffed with notes and coins.
Loved this bit!
"At least £5,000 must be left available to the taxpayer across all his accounts.".
Which is extremely generous: particularly where the alleged debtor is holding circa £15,000+++ for a forward VAT bill!
In terms of mistakes by government bodies.....
http://www.telegraph.co.uk/news/uknews/law-and-order/11372343/Government...
"Once HMRC has dealt with the objection the taxpayer can appeal against the hold notice to a County Court.".
Interesting, since recently, (April 2015) County Court Plaint (Claim) Fees escalated enormously.
Please see:
http://www.compactlaw.co.uk/compactlaw-admin/court-fees.html
HMRC have instructed your bank to freeze all accounts, excepting £5,000.........
Mr Average SME will need to instruct a solictor, who will want to brief a barrister; and demand thousands up front.......
Conclusion:
Liquid to a significant degree?
Move it offshore ASAP!
n.b. And this will assist HMRC and Government's crack down on tax avoidance and evasion.
Ok let's
take bets on how long the £5K available funds limit will last. So a year after the launch HMRC will issue a statement saying that after a fruitful year the limit is going down to £1k.
Who will the banks charge for having to supply this information?
No good appealing to county court. They will just rubber stamp the debt.
The only real problem I foresee is the error element, especially prhaps for the elderly.
what about
money held for clients, CIS, Solicitors etc. It appears that it is frozen first and ask questions later.
How many debtors have £5K?
I have a couple who ignore all demands, thinking they'll pay when they sell the house, get a big contract etc etc. If they had £5K in their banks they'd think they'd won the lottery!
In credit or just available?
I just read this article again.
"At least £5,000 must be left available to the taxpayer across all his accounts"
Does this mean that if I have a £7,000 overdraft facility, I will be left with my account £2,000 overdrawn?
They didnt listen...
In my article 'HMRC Consultations - have they listened' I wrote....
https://www.accountingweb.co.uk/article/hmrc-consultations-have-they-lis...
Direct recovery of debts (DRD)
It was in the consultation on the proposals contained in this document that the impact of ‘customer’ dissent came into its own. It would have been thought that the importance of such significant changes would have merited a consultation period in excess of the standard ten weeks, even so, by the end of those 10 weeks 124 different organisations had made their views known such that on the front page of the outcome statement it is stated that, “The government has heard the concerns voiced during the consultation and is grateful for the constructive and informative suggestions it received”. The government might well have heard but the proposals were going to be implemented whatever the views of their customers and agents.
One thing I have done for all my clients is gone into HMRC's site and deleted all the contact numbers for all clients.
So HMRC have to come to me first.
Oh dear!
JAAdams wrote: "The government might well have heard but the proposals were going to be implemented whatever the views of their customers and agents.".
That's normal!
During the past 30 years until I realised my time was much better spent elsewhere, I have made endless responses to various organs of government and even been asked to respond by one, well ahead of the day!
Conclusion: They have already decided what their plans, strategies and policies are: the supposed "Consultation" is simply an exercise in whitewash and the effluent product of a steer's rear end!
HMRC seem intent in usurping and amending established law of this nation, in a manner which can only be described as anarchic: and more suitable to an autocratic Fascist state, rather than a supposed democracy. They have changed the rule of law from innocent until proven guilty (beyond a shadow of a doubt) to guilty unless the taxpayer can prove HMRC are wrong, and afford to pursue such process.
Philosophically, I believe this has been driven by two realities:
First, HMRC's current ineptitude and desperation to both cut costs and demonstrate to equally out-of-control Government some level of success in harvesting tax revenues; and,
Second, since HMRC are increasingly driven by profligate Government to somehow raise more and more money to feed Government's insatiable maw.
Add the further political element of Government demonising legitimate and legal tax planning as somehow not fair and immoral, only because holistic taxes are far too high and voters increasingly angered by the uber-wealthy's legal tax evasion exploits when many families struggle to simply make ends meet and one can clearly see Government's own self-created dillema.
The banks served with the HMRC notices will also probably close the customers accounts as being unacceptable risks with the obvious attendant consequences. Surely this isn't what the Govt want
Paypal?
Could a taxpayer transfer money to a Paypal account and then back to their bank account once HMRC have accepted the appeal / admitted their mistake?
Mmmm
I would never advise anyone to use Paypal, here is why.
About 8 years ago my Paypal account had about $3 in it. But someone managed to withdraw over £1,000 from my current account. He achieved this feat becasue 3 or 4 years previously I had loaded up my Paypal account from my UK debit card.
Because I was checking my statement that same day for another matter, I spotted this put through withdrawal right away, and Paypal refunded me though whether they got the money off the fraudster I know not.
I also don't know if this sort of put through is still possible. But for this and other reasons I would never recommend clients to use Paypal.
Wonder what they might do in my circumstances?
Four years ago I dissolved my limited company. It only had 2 creditors and 1 debtor. It owed me a sizable amount as a director for expenses etc. I paid on it's behalf. The other creditor was HMRC PAYE and the debtor was HMRC VAT and the net result was that the company owed them about £1,000 which I paid off personally. I informed both departments about setting off the VAT against the PAYE and the VAT office ignored my letter several times. However the PAYE department also lashed up and somehow doubled the amount of the PAYE creditor and that amount, plus interest, is still showing as owed by my dissolved company to them. I have again written to their debt management team with copies of all my correspondence, about 6 months ago, and have totally ignored me. I have had no further correspondence about the so called debt but the online account is still showing an ever increasing debt with the interest they add on. I was the only director/ shareholder of the company under my old name but in 2012 I changed my name by deed poll to get away from nuisance phone calls from certain people in my past.
We have been here before
HMRC has tested the water on taking unpaid taxes / tax credit over payments direct from Clients bank accounts many times, it was always going to be rolled out.
Its that old 30 days to appeal rules, most clients sit on problems for at least one year mmmmm trouble ahead.
Mind you I dont blame George, were skint and these rules were always going to be introduced.
Published today https://www.gov.uk/government/publications/is
Read todays release at the above link, the biggest load of twaddle, misdirection and false promises I have had the "privilege " to read since HMRC introduced Schedule 36 notices. If your average taxpayer understood what was about to happen there would be an uproar a it is it will sneak through under the radar with barely a whimper from our various professional bodies. Any intelligent assessment of the content of todays missive would have us all withdraw all but £5K from all of our bank accounts and either move the withdrawn balances to a Scottish bank account or better still to a biscuit tin buried in a nice deep hole at the bottom of the garden
Next step - to outlaw cash ?
Read todays release at the above link, the biggest load of twaddle, misdirection and false promises I have had the "privilege " to read since HMRC introduced Schedule 36 notices. If your average taxpayer understood what was about to happen there would be an uproar a it is it will sneak through under the radar with barely a whimper from our various professional bodies. Any intelligent assessment of the content of todays missive would have us all withdraw all but £5K from all of our bank accounts and either move the withdrawn balances to a Scottish bank account or better still to a biscuit tin buried in a nice deep hole at the bottom of the garden
They may even make the biscuit tin option unworkable if we are to take the various hints seriously, that they want to outlaw cash itself - so that ALL transactions must be electronic. We're already on the slippery slope, with oyster cards, contactless payment debit-cards, etc. When coins and paper money are taken out of circulation, it will be only a simple extra step to make holding of gold and silver illegal (it's been done before - in the USA). We'll then be left with a choice of barter economy and automated taxation through negative interest rates on all bank balances (principle: spend it or lose it). The existence of cash is possibly the main reason that BoE hasn't so far been able to take its base rate negative.
My vision
of us working and Government giving us pocket money is not too far away. Jeremy you're nearly there lad.
What is a 'Scottish' bank account?
After all Lloyds Banking Group has its headquarters in Scotland.
I've thought
aout the cash scenario for some time and I don't think that any Government would dare do it.
We already have an internet currency and barter system. If all countries did it then perhaps it might get off the ground. It would be so easy to trade in Euro's, Ecu's or dollars. How can they ban you from having Euro's? All the brains and talented would move out. No I think that the whole idea of bank account robbing will misfire and bite the Tories on the [***].
Couldn't!
aout the cash scenario for some time and I don't think that any Government would dare do it.
We already have an internet currency and barter system. If all countries did it then perhaps it might get off the ground. It would be so easy to trade in Euro's, Ecu's or dollars. How can they ban you from having Euro's? All the brains and talented would move out. No I think that the whole idea of bank account robbing will misfire and bite the Tories on the [***].
Unless government revived the Exchange Control Act 1948, repealed by Thatcher in 1979/80. The net result of this cleverness being the majority of UK investment capital immediately departed these shores!
Which, inter alia, is precisely why Twee Georgie has had to go cap in hand to the Chinese begging them to build and fund a new nuclear power stattion!
Macca
was asked if he would move at that time. His reply was "my Accountant has told me that I wouldn't be able to spend the money I've got never mind what I will earn".
If you notice DC and co aren't going cap in hand. They are forging new trade deals so that we either have more clout in the EU or a better future when we pull out.
Some might say he's putting a rather nice ganja deal together, perhaps for a new crop of university bods. (that's a bit of satire Francois).