Assistance with tax issues and HMRC

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Overview

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.

HMRC

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

Dealing with HMRC Letters, Statutory Demands and Bankruptcy Petitions

If you have received any of these types of communications or court documents from HMRC – we can help FAST. Get in touch with our expert team. We regularly

• dispute sums claimed,
• reduce amounts owing or
• negotiate Time To Pay Agreements.

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.

Our fantastic team

Our team are highly experienced in dealing with all aspects of Bankruptcy. Our team includes

Andy Lynch

Andy Lynch has particular expertise dealing with HMRC related statutory demands and bankruptcy petitions. Andy spent 18 years working at HMRC in their investigations team before joining our bankruptcy team ass a partner at FWJ. This inside understanding of how HMRC works and deals with cases is an invaluable too when it comes to helping our clients facing tax related claims.

James Roberts

James Roberts is another partner in the bankruptcy team. He previously work at a firm of insolvency practitioners so has excellent experience in seeing how trustees in bankruptcy work – which when combined with his legal expertise, is a huge help when dealing with personal insolvency situations.

Stephen Downie

Stephen Downie is a partner at FWJ with a long history of helping individuals defend insolvency claims. Stephen is also a qualified accountant and previously worked for the Insolvency Service. His unique skill set is extremely helpful when dealing with complex financial claims by HMRC.

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Should you require any assistance with any of the above, please contact Stephen Downie or Andy Lynch. We will be happy to help you in whatever way we can.

Andy Lynch at FWJ was literally a life saver for me. I ran in to some tax issues with HMRC and I suffer from mental health issues as well so I was a complex case. Andy took his time to professionally and accurately layout my case and assist me with finding a resolution. I researched a lot of tax advisers before making my decision and I am glad I did and relieved that I chose Andy and FWJ.

Chris Kitchen

Stephen was always available to provide sound advice and steadying guidance when I might have caved in under the pressure

A company director