They've just published their annual report and revenues are up by £38.1bn to £574.9bn. Not only are they pursuing in new and innovative ways, they've also slashed their costs by closing offices and shedding staff. The effect of this being that their ability to deal with queries has diminished. By way of example, we sent a letter to HMRC on 5th April 2017 and I had a call on Wednesday (19 July) to say that they would now deal with it. Conversely, where there is a Revenue generated issue (an enquiry), they are, in may cases, pursuing formal action within 2 weeks of asking for something. I related in an earlier article the story of our white van man being accosted by compliance officers after being flagged down by the police. Another newish idea is for HMRC to get the merchant credit and debit card records for a business. They then send a general letter which looks fairly harmless but if ignored could come back and bite if HMRC decide that EFTPOS transactions have been omitted. They are also looking to check land transactions notified by the land registry and compare those with Options to Tax and then challenge if no VAT was included in the sale. This last point is fairly obscure but illustrates the point. We have no answers other than to recommend that you are ready to make a robust defence if challenged.
When our client, let's call him Stan, first told me about what happened to him a few weeks ago, I wondered if he had been the victim of a scam to get his identity information but subsequent events indicate that it was genuine. Stan's work entails driving over large swathes of the country in a transit type of van so he could be categorised as 'white van man' by the 'non cognoscente'. Stan was driving in Kent and was flagged down by a police man who informed him that he had been spotted further back not wearing seat belt. Our client argued that this was wrong and the 'spotter' was mistaken. The policeman invited him to argue when the fine inevitably landed on his door mat. He then said to Stan that he wanted to introduce him to Mrs HMRC Inspector. She then proceeded to ask Stan the following questions: Are you self employed What is your Tax Reference What is your National Insurance number Do you employ anybody What is your PAYE reference Are you VAT registered What’s the VAT number Like most of us he knew some of the answers, but not all. She promised to check his answers. In the car park where he had been pulled over were a few other parked commercial type vehicles with some unhappy looking drivers. Stan has subsequently undertaken a seatbelt awareness course, so it looks like a genuine strategy by the local police and HMRC and an attempt to catch non registered businesses.