Our superb private client tax team regularly advises its clients on a wide range of HMRC related matters. Contact our team for expert early advice. Don't settle for second best. Let us help you today.
Our tax disputes team are able to assist you when faced with a dispute with Her Majesty Revenue and Customs (HMRC) regarding accounting for taxes or enforcement by HMRC, whether against you personally or your business.
- the non-payment of Tax due to HMRC is a grave public interest concern because the state and society relies on all businesses and individuals paying their tax obligations;
- amongst the many areas for which government use taxes (which is not an exhaustive list) are education, defence and public protection, government administration and services, transport, economic growth, housing, health services, recreation, sport and culture and various benefits provided to the poor and disabled.
Given the reliance the state and society has on payment of taxes, HMRC have a policy of rigorous enforcement for non-payment of taxes.
Due to its complexity and the number of taxable entities, tax is partially self-regulating. Whether you are an individual or a company, you have a legal obligation to ensure that all returns are filed accurately and on time and payment of the taxes due on such returns are also made within the statutory time period thereafter.
Individuals are subjected to a large range of tax liabilities personally. Most commonly, these comprise of Pay as you earn (“PAYE”), national insurance contributions (“NIC”), capital gains tax (“CGT”) and stamp duty.
We can assist with the following HMRC disputes
Personal liability notices
Where an individual is linked to a company that owes HMRC money for unpaid National Insurance Contributions, HMRC may issue a Personal Liability Notice transferring the company’s liability for the unpaid contributions, to the individual.
Notices will be issued if HMRC believe that there has been a deliberate non-payment of National Insurance Contributions. This is an option available to HMRC to combat taxation fraud. Non-payment of a Personal Liability Notice can result in recovery action by HMRC. Early advice is therefore advisable.
PAYE or VAT security notices
In the majority of Company insolvencies, HMRC are owed VAT and PAYE. Where an individual has had previous business failures in which HMRC were left unpaid and where HMRC suspect this failure to account may be repeated, HMRC may request that security be given to reduce HMRC’s exposure to further bad debt.
- the requirement to pay a cash deposit as security for VAT or PAYE can significantly impact a Company’s cashflow.
- however, non-payment of a VAT or PAYE Security notice is a criminal offence and can lead to a prosecution against an individual personally and a fine.
It is therefore vital that you take early advice and act within the timeframes set down by HMRC. We are experienced in advising Companies and individuals of their options when in receipt of PAYE and VAT Security Notices.
Tax disclosures and investigations
Over the past twenty years, significant steps have been taken to combat tax fraud and tax evasion. The reduction in tax receipts to HMRC, as a result of an increased participation in schemes aimed at avoiding payment of taxes, has led to significant changes in policy, legislation and enforcement options for HMRC. Our experts can help with tax disclosures and investigations.
An individual who has underpaid tax, can make use of HMRC’s voluntary disclosure facilities such as:
- worldwide disclosure facility; and
- contractual disclosure facility
Individuals who make a voluntary disclosure do so with a view to reaching an agreement with HMRC for payment of unpaid taxes. Where an agreement can be reached via a disclosure facility, an individual will normally avoid a criminal prosecution and receive lower penalties than those that would have been applied following a HMRC enquiry.
If HMRC do instigate an investigation in to non-payment of taxes, HMRC will do so with a view to assessing whether there has been an underpayment or overpayment of taxes and whether there has been deliberate wrong doing on the part of the tax payer. We would recommend that an individual work closely with their accountant during an investigation, co-operate with HMRC and take legal advice early where deliberate steps have been taken to avoid payment of taxes.
The loan charge
Company directors, employees and relatives of company directors who have participated in a Disguised Remuneration Scheme (such as an Employee Benefit Trust (“EBT”) or an Employee Financed Retirement Benefit Schemes (“EFRBS”)) are increasingly finding themselves under investigation by HMRC.
Whether or not HMRC have already made contact, this can be a worrying time given the ongoing changes in legislation, the tightening of government policy in this area, the application of the loan charge and the potential for Liquidators’ claims against directors who participated in a Disguised Remuneration Scheme.
The loan charge was a charge introduced, by the Finance Act (No.2) 2017, on loans considered to represent Disguised Remuneration Schemes. The introduction of the loan charge was a further step taken to clamp down on tax avoidance.
One thing is clear, this is an area where it is better to take advice sooner rather than later. Our team can advise you regarding your liability, your options and the best strategy to adopt where you have:
- received monies from an EBT or EFRBS and would like to understand your position before HMRC make contact:
- received an Accelerated Payment Notice or a Regulation 80 Determination;
- been contacted by a Liquidator in relation to a potential claim against you personally;
- received notice that HMRC intend to transfer liability for payment of PAYE from a business to you.
Further information on Disguised Remuneration Scheme and a business’s options can be found here.
Time to pay arrangement
Where an individual is unable to pay their tax liability, they can seek to agree a time to pay arrangement with HMRC. Where agreed, this will allow repayment of the tax due over an agreed period of time. HMRC will assess an individual’s financial circumstances and determine how much can be paid by way of monthly instalment, in repayment of the debt.
Reaching a time to pay arrangement before the statutory deadlines for late payment penalties is advisable, so to avoid an increase in the amount owed.
Should you require any assistance with any of the above, please contact our Director Services team. We will be happy to help you in whatever way we can.