Newth talks tax - Enquiry and very ill client

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Clive Griffiths disclosed that his firm was in the early stages of a fairly serious non-disclosure case, in his query dated 28 February 2008 (see 180108). The case was already progressing, and there were many unidentified bank lodgements amounting to £375,000 in the period of six years up to 2006/2007. Clive later amended this to £656,000.

The client had not retained bank paying in slips. HMRC had initiated the enquiry on the back of an offshore disclosure in the previous year. That itself was subsequent to a section 29 disclosure case involving undeclared chargeable events, where large figures were involved.

The client was 70 years of age and quite unwell. His GP had written a lengthy letter to Clive’s firm and HMRC advising the inspector of the extreme level of stress the...

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28th Jul 2009 16:34

I would be concerned about informing HMRC that the client is ill and wants the enquiry over with quickly, in effect it informs HMRC that they are likely to find it easier to get approval for a higher assessment ... even one with a dodgy basis.

Still, if you have informed them of such and made an admission of errors, offered a settlement, offered information and help to further the enquiry, and then even after a doctor’s letter there is no real movement there is obviously the basis for a letter to the regional head in order to ask for closure ... or the facts will be taken to the Tax Tribunal to obtain closure.

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By Anonymous
28th Jul 2009 19:46

Many many years ago when I trained in Revenue in an talk from then enquiry branch we were told that inspectors there expected 2 suicides a year from their caseload.

Whilst some consideration is needed of the health aspects this is not a speculative fishing exercise but the case of a man who has deliberately avoided his responsibilities. Sometimes people react to that situation in an extreme way. I am not sure that this should deflect HMRC from pursuing them. I wonder if the doctor concerned has thought about what the NHS could do with that amount of money. He might have a point if HMRC were proposing a criminal prosecution but not otherwise.

A tough call for the adviser but I agree with above that maybe disclosing to HMRC at early stage not best policy.

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