FT Article: Judge accuses HMRC of making up figures to terrorise people

[ChimpMaster]

This has happened to hundreds of us, with the obscene and completely wild guesses HMRC took on perceived loan receipts.

"We are committed to treating all taxpayers with respect by taking individual circumstances into account". Now that is a complete and utter lie. HMRC know that. The world knows that.

I have an idea: HMRC should be made to pay legal fees for all cases they lose in Tribunal/Court. They should not be allowed to squander taxpayers' money; they should be forced to set aside a budget for legal cases and only if they win, should they be allowed to retain that budget.

[CanPayButWouldRatherNot]

something that is trending on twitter in the usa rings a bell here

'THE CRUELTY IS THE POINT'

[BrilloPad]

Mr Cussens, who represented himself with help from his 81-year-old father,

I noted the usual nonsense from HMRC though. Total liars.

[hudson]

Judge accuses HMRC of making up figures to terrorise people
Tax authority ‘plucked from the air’ numbers to frighten taxpayer on incapacity benefit

Emma Agyemang in London 3rd September 2019

The UK tax authority has been accused of making up figures to terrorise people by a judge who said a six-figure bill had been “plucked from the air” to frighten a taxpayer receiving incapacity benefit.

Experts warned the case was part of a trend of HM Revenue & Customs making mistakes and failing to properly check demands issued to taxpayers.

In a judgment published last month, Judge Geraint Jones QC ruled in favour of the taxpayer who had appealed against a tax bill and penalties of £342,000.

The First Tier Tribunal heard that in 2018 HMRC had issued income tax assessments worth £272,840 against Sebastian Cussens, based on its belief that he was a sole trader buying and selling cheap second-hand cars. HMRC alleged Mr Cussens had failed to declare trading profits between 2005 and 2016 and also issued him with penalties of £70,102.

However, the tribunal heard that Mr Cussens, who represented himself with help from his 81-year-old father, had been in receipt of enhanced employment and support allowance. This benefit is paid to people unfit to work because of physical or mental impairments. The judgment added that, based on observations at the hearing, the tribunal believed Mr Cussens “lacked the skill, ability and perhaps the understanding to deal with this appeal properly”.

Nevertheless, the tribunal found fault with the basis on which HMRC calculated the bill issued to Mr Cussens, heavily criticising its assumption that he could have made a 50 per cent net profit margin as “wild, extravagant and unreasonable”. The judgment noted that HMRC’s lawyer was unable to explain how the profit margin had been arrived at.

“It smacks of being a situation where, because the appellant had been uncooperative and was sticking his head in the sand, the respondents [HMRC] decided to issue assessments almost “in terrorem”, in a bid to persuade the appellant to engage properly in the matters under review,” the judgment said.

“We have seen nothing whatsoever in the documentary evidence to suggest that any thought, consideration or analysis whatsoever was undertaken by either the [HMRC] assessing officer and/or the [HMRC] review officer to decide whether taking a net profit figure of 50 per cent of supposed turnover was or was not a reasonable basis upon which to proceed. We are firmly of the view that figure was simply ‘plucked from the air’.”

The judge acknowledged that Mr Cussens had failed to co-operate with HMRC and had not mentioned his health condition to them before the hearing.

Mr Jones, who set aside the tax bill and all the penalties, also criticised HMRC officers for not considering the plausibility of a person, deemed unfit to work on account of their physical or mental impairment, earning tens of thousands of pounds from their own efforts.

“It seems that nobody at HMRC is actually reality checking these cases and asking’ is this a realistic amount?’ [to seek],” said Keith Gordon, a barrister at Temple Tax Chambers. “All they’re seeing is the numbers. It’s as if they are playing a game of Monopoly.”

Mark Taylor, head of tax investigations and dispute resolution at accountancy firm Buzzacott, added that the case showed that the “safety nets” within HMRC were not working and there was a lack of commercial experience at the authority.

“Somebody of experience in HMRC would have signed off these figures, then a review officer has also signed them off, then it’s gone to HMRC’s solicitors who have said ‘let’s proceed to tribunal’ and no one has detected that this case has fundamental flaws,” he said. “We see too many of these cases to view them as isolated.”

HMRC said in response to the ruling: “We are committed to treating all taxpayers with respect by taking individual circumstances into account. We are carefully considering the judgment.”


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