Editorial team AccountingWEB.co.uk
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Concern over HMRC Exeter experiment

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23rd Mar 2010
Editorial team AccountingWEB.co.uk
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Accountants have expressed concern over a new HMRC pilot scheme in Exeter which involves contacting local businesses directly rather than going through their professional advisers.

HMRC has launched a new pilot scheme in Devon which involves contacting business owners direct, to arrange a two day examination of their tax records, without reference to their professional advisers.

“This initiative may be aimed at distancing business owners from their tax advisers and putting them under aggressive scrutiny by the taxman”, warned Andrew Browne of South West based chartered accountants Bishop Fleming.

In a statement released today, an HMRC spokesman said: “HMRC recognises the important role that tax advisers play in business, and is not seeking to disengage their input from the process.

"However, HMRC remains committed to minimising the compliance costs to both the customer and HMRC, and to that end, has launched a pilot project in Exeter which aims to look at how compliance checks may be carried out more effectively and efficiently. This work will explore, amongst other things, the scope for contacting businesses by phone to arrange a compliance review”.

 The spokesman explained that it would be a similar approach to an approach many SME business customers would be familiar with in relation to individual checks of VAT or PAYE.

He advised that the extent of agent notification would be dependent on the level of customer authority held. If HMRC checks taxes that the agent is not authorised to act on, it will only send out a brief acknowledgement that the client has been contacted in relation to a compliance check. The customer will receive a letter explaining this and saying they may wish to share the detailed letter with their adviser to discuss it in more detail.

The scheme is an ‘open pilot scheme’, which means it will be kept under review before being rolled out elsewhere. “No decisions will be taken until the outcomes of the pilot have been rigorously assessed”, added the spokesman.

“My advice is that any Devon business receiving this new direct approach should alert their accountants before responding”, added Andrew Browne.

 

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Replies (6)

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By cymraeg_draig
23rd Mar 2010 22:41

Desparate taxmen

Instruct clients, as we have ours for years, to simply refer the Revenue to ourselves and refuse to enter into any discussion or agree anything.

Where clients have entered into discussions directly we have more than once smply ceased to act for that client as we are not prepared to second guess what a client may or may not have said.

 

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By johnjenkins
24th Mar 2010 09:51

Dis-engage

I like the way HMRC say they do not want to dis-engage tax advisers. No not much. Why are HMRC continually coming out with this sort of garbage when they should know by now that their divide and conquer tactics have been rumbled ages ago?

I'm waiting for the piece of legislation that says at certain meetings advisers or agents wiil not be allowed to take part!!!!!!!!!!!!!

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By kenfrost
24th Mar 2010 10:18

The Eternal Triangle

Threesomes are fun;)

http://hmrcisshite.blogspot.com/2010/03/eternal-triangle.html

Ken Frost

www.hmrcisshite.com

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Nichola Ross Martin
By Nichola Ross Martin
24th Mar 2010 10:49

Nothing new

This may be a "new pilot" but I have had several reports of HMRC out and about and contacting taxpayers directly.

HMRC say that they are mindful of the 64-8 issue as alluded to above. The sensible (and practical) thing is to brief all your clients and ask them to contact you if they are contacted by HMRC.

Like it or not HMRC has now got wide powers of inspection and we have to work within this regime.

Virtual tax know how and support for accountants: www.rossmartin.co.uk

 

 

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By Anonymous
24th Mar 2010 12:30

Insurance implications?

If the contact is not through advisors, and the client makes a response, I am concerned that this may negate the fee insurance the client has taken out for just such an eventuality.

 

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By Trevor Scott
24th Mar 2010 13:34

Certainly going back at least fifteen years...

...I can recall Officers doing "till checks" by just walking into shops, claiming they have the right to do on the spot till checks and warning of consequences for non-compliance. In the days when VAT Officers had some integrity it was sorted with a quick call tot he over eager Officer's boss.

However, these days it is an opportunity to "create" the evidence of taxpayer admissions that will be used as either the basis for a serious enquiry and results in a large settlement/costly defence. 

The same cash handling businesses without till rolls still have the highest risk. Best defence is the same, good accounting records, till rolls, and only communicating with the Revenue through an agent.

But as HMRC know, there aren't too many business owners who have the guts and knowledge to stand up to a couple of Officers quoting unspecified laws and threatening consequences for failure to comply with ..... "reasonable requests" to look at information and ask loaded questions for the purposes of inventing evidence to base silly assessments upon.  

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