HMRC’s annual report was published on 13th July and, to be sure, the headline figures looked extremely healthy with tax revenues increasing by £38.1Bn to £574.9Bn.
The problem is that, at the ground floor, where HMRC interacts with taxpayers and their agents, the service is becoming ever more chaotic. To be sure, HMRC has some ambitious plans for change over the next few years with Making Tax Digital and The concentration of their resources into just a few large offices but this is currently creating its own problems and the Government conceded on the same day that MTD would need to be delayed until 2020 for income tax purposes (but not VAT).
The proposed closure of the majority of HMRC’s office network is also causing significant problems with officers and inspectors leaving or being reallocated internally and it is not uncommon at the moment for some long running cases to be on the 4th or 5th Inspector. This presents clear challenges to accountants and their clients at a time when HMRC’s compliance activity is increasing across the board.
At Croner Taxwise, our clients are seeing an increase in one-size-fits-all approaches to HMRC enquiries where HMRC is using a variety of techniques to maximise revenue. Good examples of this are the opportunity letters sent out recently to people who allegedly held merchant credit and debit card accounts. The letters seem innocuous enough but if you have received such a letter and you fail to do anything about it, if HMRC then enquiries into a return and finds under declared takings, they are likely to charge a penalty in the “deliberate” banding i.e. up to 70% of the tax under-declared.
HMRC compliance activity is increasing across the board, and this report mirrors our experience as a Fee Protection provider through the number of Claims we are receiving and what our clients are saying about revenue activity. There has never been a better time to partner with us.
Croner Taxwise Consultancy offers a comprehensive compliance representation service. If you wish to discuss any particular issues, please call 0844 728 0120 or email firstname.lastname@example.org