HMRC on the lookout.............

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HMRC on the lookout.............
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Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon May 05, 14 7:11 pm Post subject:

Nick wrote:

Treacodactyl wrote:

If I google that the first thing that comes up is this: https://www.accountingweb.co.uk/press/hmrc-continue-attack-uk-tax-gap

Well, yes. That's because that was the source.

Just wondered why you didn't post the link, it gives a more rounded view of the story.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Mon May 05, 14 7:13 pm Post subject:
It made the salient point that empirically, no one sector appears to be being targeted.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon May 05, 14 7:14 pm Post subject:
Sorry, I thought you were making the opposite point.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Mon May 05, 14 11:46 pm Post subject:

madcat wrote:

Think they're lookin If the wrong place, but as always it's hit the soft target and pick on the little guy.

Little guys aren't a soft target for tax; the little guys will cost more to investigate than they yield, unless they're seriously on the fiddle, but then they're no longer little guys. These rumours are nothing to worry about, unless you have something to worry about...

madcat

Joined: 24 May 2008
Posts: 1265
Location: worcester

Posted: Tue May 06, 14 8:10 am Post subject:
Nothing to worry about but if it costs so much to collect maybe HMRC had better start looking harder at the big boys.

Mistress Rose

Joined: 21 Jul 2011
Posts: 15970

Posted: Tue May 06, 14 8:24 am Post subject:

Sometimes it isn't about the money, it is about the government being seen to be doing something. Under Maggie, there was a big purge on 'sickness benefit cheats'. Everyone had to go through a massive form and most were then called to a medical. It cost millions, and I think they saved perhaps a few tens of thousands and caught a few cheats before the whole thing was discredited to the extent it was withdrawn.

In the case of HMRC, if they can be seen to be 'catching' a few thousand 'cheats' from small companies who then go bust because of the accountants fees, making a few hundred pounds for the Treasury having spend a few million, it can be paraded as a result.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Tue May 06, 14 8:32 am Post subject:
They're going to have their work cut out.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Tue May 06, 14 8:32 am Post subject:
Well if they take out a few of the rogues it can only help keep genuine craft businesses going, because supply seems to be higher than demand.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Tue May 06, 14 8:33 am Post subject:

Rob R wrote:

Little guys aren't a soft target for tax;

They used to be (from someone who worked in HMRC once told me) as it was far easier to met annual targets by going for small traders than large corporates.

Nicky cigreen

Joined: 25 Jun 2007
Posts: 9881
Location: Devon, uk

Posted: Tue May 06, 14 8:40 am Post subject:
and little guys can't afford big solicitors

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue May 06, 14 8:49 am Post subject:
Would you need a big solicitor? From a practical point (sorry) is it that hard for a 'craft' person to keep track of what tax the owe, pay it and quickly answer any query? Are there any thresholds before you start paying tax? I.e. could you make up to �100 a year without having to declare anything or do you have to file a return even if you make just �1?

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue May 06, 14 8:54 am Post subject:
The theory is you're supposed to declare everything, but, the taxman can, and often does, advise you not to bother below a certain level. I'm not sure this level is official, or fixed. But, a tax return is pretty simple to do without an accountant, and certainly without a solicitor, for small organisations.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Tue May 06, 14 9:01 am Post subject:

Nicky Colour it green wrote:

and little guys can't afford big solicitors

Then they should join a union, such as the FSB.

Nicky cigreen

Joined: 25 Jun 2007
Posts: 9881
Location: Devon, uk

Posted: Tue May 06, 14 9:17 am Post subject:

Nick wrote:

But, a tax return is pretty simple to do without an accountant, and certainly without a solicitor, for small organisations.

yes, tax return is simple - and HMRC are very helpful.

My point was they are likely to have better results targeting small businesses for inspection, because they wont (and don't) win against the big guns with their expensive lawyers, plus it is expensive.

Small businesses can be inspected within a day by one inspector - it's cheap and easy to do.

Last time I attended an inspection, in my capacity as bookkeeper/ wages clerk, he argued the vehicle owned by the company must be used for personal use some of the time. I argued back that everyone had their own cars and thus had no use for the company car. He conceded my point. He asked if the employees (2) received a christmas bonus. I admitted they got a bottle of wine and a turkey. He told me he hadn't heard that... and ignored it. He found a small mistake, we agreed to make amends in the next tax return, he was happy and left.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue May 06, 14 9:31 am Post subject:

Oh, you're right. And the first line of investigation is likely to be a phone call or letter, which is more likely to be dealt with by a small outfit, especially those that are a bit rubbish at dealing with tax, rather than those attempting to avoid.

Large corporations throw them to the admin side, and allow them a slow death, or progress, with accountants and legal sides.

Going after thousands of small businesses probably makes financial sense.

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