Lack of records lands taxpayer with £200,000 tax bill
In the face of an extraordinary lack of evidence HMRC was forced to estimate the taxpayer’s income from letting property, self-employment and dividends over 16 years.
You might also be interested in
Replies (17)
Please login or register to join the discussion.
"Had Shariff retained even the most basic supporting evidence, as he was required to, he would no doubt have been able to reduce the value of estimated assessments."
Why do you have 'no doubt' about that? Maybe the estimates were too low. Maybe there was stuff HMRC never found out about.
I go with your opinion on this
Destroying records during an enquiry is not the decision of a person who wants the figures to be accurate
It's a perfectly reasonable statement. Shariff said the assessments were too high, as stated in the article. There was no evidence this was not true, as stated in the article. It's perfectly reasonable therefore to say that had he presented any evidence at all he could have reduced the assessments.
He should have sold up and left the country as soon as he became aware they were onto his case. Now he faces bankruptcy and losing everything.
This happens all the time and makes my blood boil!
So his income was similar to that when he was employed? Wrong!! IT consultants double their take home pay when they cease employment and work for themselves, which is why they leave employment. So, hmrc only found half his income.
Why no penalties? Where are the £3k pa x 16 loss of records fines? For every one of these guys that get caught there are another 100 getting away with it. They should simply be sent to jail. Of course you can bet hmrc only found half of what he was hiding, which he had the gall to appeal on, which would be recouped by the maximum 100% tax geared penalty for providing no help, being tardy and concealing (burning) all records.
Only just two days ago I walked into one of those phone refurbished/repair shops on a major town high street, where the rent they pay is close to the vat threshold and they tell me they are not yet vat registered when I ask for a vat receipt yet they've been there for years of course. From the volume of footfall they get, their turnover is likely to be about £500k I imagine. This is rife in this industry, as well as other industries such as barber shops, nail salons etc etc I've come across being in my practice near the high Street and these types coming in to see me.
Why is the government so soft on these people yet clamps down hard on those trying to be compliant?
Sorry, rant over!!
I sympathise with the rant. The simple truth is HMRC don't care two hoots about such cases as it involves too much time and skilled staff they don't have and, of course, they no longer have local tax offices where Inspectors could spot these people as they wander about their normal lives. They aren't too difficult to see but if you turn away you won't see. And what about the AML reports - how many of them get followed up? We get a freebie advertising magazine for local traders and quite a few of them look highly dodgy. Does HMRC look - no it's too busy trying to collect exhorbitant SDLT off people moving house. About time the Politicians got into the real world and took HMRC with them - still with their eyes firmly closed to reality it probably wouldn't make much difference.
I think the simple answer to high street undeclared cash in the pocket fraud, is to make cash digital. You go to a"hole in the wall" or bank, and put cash on a card. Paper and coil money then disappear and their is a digital trail of money in and out.
Legal traders will prefer this, as then they don't have to worry about having to get change and cashing money at the bank, which is more expensive than the 1% card fees for machines.
If businesses complain about the 1% card costs, they don't know how to run a business. If everyone has to increase their prices by 1% and they don't, their is something wrong with them.
Suddenly the £100bn annual "under the table income" will appear as fraudulaent traders would worry about their digital trail of how cash was spent and received.
You obviously live in a city or town! Getting to a bank or ATM can be hard work for those in the countryside, and who wants to be a sub postmaster given the way they have been treated?
Totally agree. They should thrown the crook in jail. I can guarantee 90% in the construction industry avoid one form of tax or the other or overclaim on CIS refunds.
Tax evaders exist as they know HMRC are lax and their mates are doing it. I had one client who I thought was decent but then he saw his construction friends boasting what they were doing to evade tax so he started to not to pay tax. When I pointed it out that tax was due he decided to disengage my services and did the filings himself.
I doubt HMRC has found the half of it ... I am sure the tax will be paid, after a respectable tussle over lack of funds, and the individual will manage to keep his head above water with the help of friends and family. I have no sympathy for someone who destroys/does not keep records.
HMRC probably didn't find even half of it in this case.
They should wait and see where funds come from to pay the assessment, then investigate all those sources too.
I'm surprised HMRC didn't use their powers to obtain full bank records and make it a criminal case.
This sort of criminal dishonesty needs sentencing plus asset seizure.
I thought HMRC has powers to access his bank account and at least work out his income more accurately ?