SME Enquiries: Avoiding disputes and agreeing a settlement. By Nichola Ross Martin

Kashflow logo
Share this content

HMRC has just set out its strategy on tax litigation and settlement. The article looks at what this means for SMEs and their advisors.

The merger of H M Revenue and Customs has been described by several onlookers as more like a reverse take over by the smaller of the two departments, and the old Revenue side is certainly keen to get its hands on those extra powers too. Radical staffing cuts are underway to cut costs, but the leaner machine is also appearing as a more inflexible machine and nowhere is this more apparent than in HMRCs latest guidance on its Settlements and Litigation Strategy.

The Litigation and Settlement Strategy sets out the principles HMRC is aiming to follow for both avoiding a tax dispute where practical and also bringing a tax dispute to a conclusion. Tax dispute...

Please Login or Register to read the full article

The full article is available to registered members only. To read the rest of this article you’ll need to login or register. Registration is FREE and allows you to view all content, ask questions, comment and much more.

About AccountingWEB


Please login or register to join the discussion.

26th Jun 2007 11:08

Re: Any Good Enquiry Manuals
In response to Mr Pritchard's comment about enquiry information, we at CCH Fee Protection regularly hold seminars informing accountants of HMRC activity. One of our senior consultants, John Baldwin will be giving an enquiry update at our Open Day on the 6th July, as will other key speakers. Should you wish to receive an invite please email [email protected]
Aaron Lawrie
CCH Fee Protection

Thanks (0)
28th Jun 2007 16:26

Talking General Commissioners then most cases are either enquiry cases, where they are asked to judge the facts, or they are status disputes.

The basic rule I have always followed once we get into an argument is to ask yourself "how will this play before the Commisisoners" ? If the answer is not well, then you're probably wasting your time arguing !

HMRC are just beginning to develop a strategy for life after the GCs with the new tribunals - on the face of it not good news with more pomp and circumstance and less common sense. Not, I should stress, HMRC's fault at all - the package comes from the charmingly named Ministry of Justice (I thought only totalitarian states needed those...). They will be looking for input !

Thanks (0)
26th Jun 2007 12:44

Coping with the evolution of the enquiry regime - Oct '07
In response to Mr Pritchard's comment PTP Limited are running a series of CPD seminars throughout the UK.During October '07 top tax lecturer Andrew Gotch will deliver the above seminar at eight locations nationwide for £59 per seminar.Please visit our website and follow the links for 'Training' then 'Seminars & Conferences'.Alternatively contact me as below.

David Peddie
[email protected]

Thanks (0)
26th Jun 2007 06:21

training first?
This is all very well but the grass roots will need to be trained to adopt this "VAT" approach before we see any real move to the high level "guidance". The guidance has all the hallmarks of someone laying down principles without thinking of the ramifications - much like the VAT principles of assess and litigate - whatever the strength of your case. How many investigations/technichal arguments are conisdered by their exponents to be weak? Not many I think and unless you are able to see the whole package you may not see the particular individual point in proper perspective. Roll on the compensation claims and nice to get back to reality with our "voluntary customers" being called taxpayers (or should it be non-taxpayers?)
[email protected]

Thanks (0)
25th Jun 2007 18:42

Costs of Litigation?
My reading of the Litigation and Settlement Strategy (LSS) paper suggests that there will be potentially be more litigation in the future not less. This is because the instruction is for HMRC officers not to concede a point where they feel the weight of the law is behind them; the Strategy document tells us that it is 'ALL OR NOTHING'.

As we all know, most 'disputes' in tax are well and truly in the grey - very little is black and white. My concern is that 'horse trading' in enquiry cases will now (rightly or wrongly) be a thing of the past if Inspectors start to adopt the letter of the LSS paper and start litigating because they feel the weight of the law is behind them. However, the odds are stacked against the taxpayer under the current system; even if the individual wins the tax argument at Appeal, he or she is going to have a legal bill which could exceed the tax at stake.

Award of costs against HMRC exist for VAT & Duties Tribunals and, as one of the stated intentions of this LSS document is to align Customs and Inland Revenue, I would have welcomed this initiative much more if it had been issued alongside the long awaited revamp of the integrated HMRC Appeal system. But maybe that might not work to HMRC's advantage?

Thanks (0)
25th Jun 2007 19:54

Any Good Enquiry Manuals?
Hi everyone, and thanks Nichola for your comments above.

I run a small practice from home - just me and another part time accountant - specialising in individuals and small owner managed businesses.

It seems that more and more of our clients are receiving "aspect enquiries" and this is an area that I find really interesting. At the risk of sounding a bit geeky, I like nothing more than quoting tax legislation at HMRC - especially when they are pushing their luck a little bit!

I have not yet had any full blown enquiries to deal with, and certainly none that have needed to go before the special commissioners, but I'm sure that this will become the case sooner or later.

Can anyone suggest any good manuals, books etc on how to conduct and deal with HMRC enquiries? As I find this area so interesting, I would also be interested in attending courses to increase my knowledge and give me additional experience and confidence so that I can market these services to potential clients.

I apologise if I have taken this thread off at a slight tangent, but I would be really grateful for all your comments and suggestions.

Kind regards,

Thanks (0)