Reply to: innocent mistakes on self-assessment tax returns may be punished

[BrilloPad]

Need to make up for the HMRC directors bending backwards for the like of Bernie Eccelstone.

+1

Though its not just the rich - its large companies too.

[VectraMan]

I've never understood why the banks can't just report the amount of interest and tax you pay direct to HMRC. If you got the SA and the PAYE bit (which they know) and the interest bit were already filled out, it'd be much easier. And it means they can collect extra tax from higher rate payers from interest without an SA, although with ISAs and pensions you have to be a bit stupid to be caught out by that.

[lilelvis2000]

Need to make up for the HMRC directors bending backwards for the like of Bernie Eccelstone.

[SueEllen]

Have you thought about ringing HMRC and asking for her to be removed from the SA system? 5 years of nil returns should mean they will consider it. I don't think they want to have the system clogged with people filing SAs who don't owe any tax.

I think they are perfectly happy with this as it will fulfil one of their KPIs.

Some of the people I know who are on PAYE and higher rate tax payers have been told not to complete a SA form. Strangely every year they did a tax return and every year HMRC owed them money.

[TheCyclingProgrammer]

What's KPI?

Key performance indicator.

[TheCyclingProgrammer]

That is true. But if you owe nothing in tax you are fine. MrsBP once got threatened with £60/day fine. Acoountant sorted it but said as she owed nothing there was never any chance of the fine going ahead.

Have you thought about ringing HMRC and asking for her to be removed from the SA system? 5 years of nil returns should mean they will consider it. I don't think they want to have the system clogged with people filing SAs who don't owe any tax.

[Sysman]

"Tax experts warned…" - well, it was very nice of them to do that. An example of selfless service for the benefit of the wider public, offering helpful warnings with no thought of drumming up business for themselves.

Well done, tax experts!

Yeah I suffered from this when choosing my first accountant.

Too many of them wanted to instil fear uncertainty and doubt (aka FUD).

And as I discovered once I started lurking on financial advice forums some of 'em weren't even familiar with the contents of the then current VAT Handbook.

I had some fun with that back in the day.

[Sysman]

I was a tax inspector myself, nearly 2 decades ago. The inspections with the big boys and their accountants were the most interesting, as you could argue statutes, case law, and there was a mutual respect in many cases. Big money in some cases, but they generally took months (and sometimes years) to resolve.

I left mainly because of the govt directive that we had to focus on the "mom and pop" run businesses as they were quick and showed the public our presence.

It's not about "pressure" (they're civil servants after all...), it's about targets and KPIs.

What's KPI?

[doodab]

This comes under the heading of defensive tactics. By not declaring your 10p in interest to the tax man they can use this trivial oversight to launch a full blown investigation. It's well known and common practice on their part for a number of years. You can argue all you like, but that is the fact.

This is where a contractor running through a limited is at an advantage IMO as we all have accountants to deal with this crap for us. It's much less stressful and we're much less likely to get bullied.

[BrilloPad]

This comes under the heading of defensive tactics. By not declaring your 10p in interest to the tax man they can use this trivial oversight to launch a full blown investigation. It's well known and common practice on their part for a number of years. You can argue all you like, but that is the fact.

That is true. But if you owe nothing in tax you are fine. MrsBP once got threatened with £60/day fine. Acoountant sorted it but said as she owed nothing there was never any chance of the fine going ahead.

[meridian]

Thats because they can't stand the pressure of being bent over by the Big boys and their decent accountants.

I know they have to appear strict but frankly it seems like scare tactics.

I was a tax inspector myself, nearly 2 decades ago. The inspections with the big boys and their accountants were the most interesting, as you could argue statutes, case law, and there was a mutual respect in many cases. Big money in some cases, but they generally took months (and sometimes years) to resolve.

I left mainly because of the govt directive that we had to focus on the "mom and pop" run businesses as they were quick and showed the public our presence.

It's not about "pressure" (they're civil servants after all...), it's about targets and KPIs.

[BrilloPad]

There are large swathes of higher rate tax payers in PAYE employment who never ever fill out a tax return - their interest presumably isn't taxed. Are they going to make every higher rate payer fill out a return?

Interesting comment. MrsBP gets to do a tax return every year as she was director of my limited for 2 years. 5 years ago I went permie and she has not earned anything since (she stays at home to wash my socks) - but I have to fill in a form every year. Total waste of time.

Any higher rate taxpayer who does earn interest should be requesting a tax form. Not sure what the penalty for not doing one is - is it burning at the stake or hanging?

[vetran]

Most tax inspectors retire in their 50s with state pensions

Thats because they can't stand the pressure of being bent over by the Big boys and their decent accountants.

I know they have to appear strict but frankly it seems like scare tactics.

[DodgyAgent]

There is a simple answer. stop taxing people to oblivion and start spending the tax efficiently and effectively.

Most tax inspectors retire in their 50s with state pensions

[barrydidit]

There are large swathes of higher rate tax payers in PAYE employment who never ever fill out a tax return - their interest presumably isn't taxed. Are they going to make every higher rate payer fill out a return?

They ought to do because according to these guys

Even if the amount of income is very small, they have a responsibility to notify HMRC and then complete a tax return once told to do so.

If I were Hector, i'd start hassling anyone who paid 40% paye and hadn't sent in a SA return. Even if they got a penny a month on their current account, it's a £100 fine for not filling the form in. Got to be creative in these tough times