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You can of course expect the usual supine response on this from our professional bodies, who are supposed to support the taxpayer, not HMRC and at least it's nice to see an ex Inspector telling us all how it really is these days with HMRC.
Is HMRC just trying to get in its excuses now for why it has failed to raise assessment on Employers now caught by the Rangers tax case, a case HMRC has been arguing for many years, but where HMRC have failed to issue in time assessment and also its excuses for failing to take action on Contractor cases that it has been investigating for a decade and where HMRC now hopes to cover its mistakes with a retrospective 2019 Loan Charge. By getting in their pre-emptive excuses now, when the backlash comes and people are being made bankrupt and hit with a retrospective tax charge, HMRC can then argue that they should always have had 12 years anyway and this new law will be shown to support them in that claim.
HMRC are getting increasingly slap dash and desperate. Allowing a 12 year assessment period just means that they will be even more slap dash and desperate.
The suggested tax take for 2022-23 is just unbelieveable. HMRC and the treasury can't get it nearly right one year ahead so this looks like a pure guess.
What concerns me most is that instead of sorting out the current mess HMRC are just trying to justify having an even longer period to make a mess.
HMRC are increasingly relying on the fact, that the burden of disproving an assessment they have raised, lies with the taxpayer. The further back you go, the less likely the information to demonstrate HMRC got it wrong, made it up or just had a wild guess, will be available.
As I understand it the Data Protection Regulations state that we should keep records for no more than five years, unless there is good reason to keep them longer (and we have client permission), thus making it even more difficult for us to deal with enquiries from HMRC.
On another forum, I posted this when the consultation came out in February about 3 weeks ago. And I received no reply from forum members :S
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What do you guys think of this?
https://www.gov.uk/government/consultations/extension-of-offshore-time-l...
In any event, HMRC is able to raise protective assessments up to last 6 tax years from the year in which they inquire into any tax return or when a disclosure is made.
Do you buy their reason below?! I think they are either trying to cover their inefficiency and incompetence or obviously trying to get away with the fact that they are not happy with 6 year limit for offshore matters. :roll_eyes:
HMRC is extending the time limit because it can take much longer to establish the facts about offshore transactions, particularly if they involve complex offshore structures. More time is needed to address situations where the current assessment time limits of 4 and 6 years for offshore non-compliance are not long enough to establish the facts, and determine and assess the amount of tax due.
I think these proposed measures are to cover the inefficient investigation processes and lack of sufficient wide ranging and competent tax expertise in HMRC. As with comments in above about Rangers case and Loans, HMRC can't even assess a case where all the evidence and calculations are presented to it where tax underpaid was deliberate and concealed.
What would be best all round is simplification of the tax system! HMRC would no longer need the time they have stated and taxpayers aren't at risk. Pretty simple!
They off course will take 11 years and 11 months to then ask you to respond within 30 days.
Why do they think it takes 12 years to get a response from overseas or other Institutions. Even 6 years is a bit much.
This is nothing whatsoever to do with the length of time these things take. It is quite simply just a further signal to "offshore tax avoiders/evaders" that HMRC are going to treat them as a special class of offender. It's entirely on all fours with the introduction of a maximum 200% penalty for tax due where there has been pretty well any offshore element. To keep the analogy going: "Bad dog! Very bad dog!!"
To keep the tax scales balanced, will HMRC also extend the time limits for overpayment relief? Don't hold your breath!