Our Friends Inland Rev The tax man

[noogie]

I have a dispuye with IR and am going through the appeal process. They dont want to wait any more and are trying to collect.

They are asking for income expenditure am I obliged to give it or can I state no until the court asks.

 

They are getting nastier and nastier and each xmas I either have a warning that bailiffs will come, threat of bankruptcy, distraint order then after xmas they apologise.

 

Gues what nearly christmas and they are off again

 

Any legal experts out there:???: could do with some help

 

PS if you the inloand rev are reading this, happy Christmas big boys. and I am still in the appeal process its my right

[noogie]

I have a dispute with IR and am going through the appeal process. They dont want to wait any more and are trying to collect.

They are asking for income expenditure am I obliged to give it or can I state no until the court asks.

 

They are getting nastier and nastier and each xmas I either have a warning that bailiffs will come, threat of bankruptcy, distraint order then after xmas they apologise.

 

Gues what nearly christmas and they are off again

 

Any legal experts out there:confused: could do with some help

 

PS if you the inloand rev are reading this, happy Christmas big boys. and I am still in the appeal process its my right

This is on Debt forum but I dont know how to transfer to this so please be gentle

[hungrybear]

More information?

how much roughly? why do they think you owe it? why do you think you dont?

[citizenB]

If there is an appeal in place then should they actually be pursuing this ?

 

I will flag your question for the site team.

[42man]

The HMRC seem to have powers greater than the police !! If there is a bona fide and substantial dispute and they attempt a bankruptcy petition, then it would be considered an unlawful action on their part. I know they use this route quite often.....

[Guest wino]

Why is it every Christmas? What are they chasing you for unpaid tax or failing to supply self assesment on time?

[hungrybear]

The HMRC seem to have powers greater than the police !! If there is a bona fide and substantial dispute and they attempt a bankruptcy petition, then it would be considered an unlawful action on their part. I know they use this route quite often.....

 

It is been suggested in a TV documentary that HMRC have made people bankrupt on a 'you prove we shouldn't have done it / that got your attention now pay up' basis

[citizenB]

You had two threads regarding this issue. They have been merged.

[Guest wino]

They seem to want you to pay up front then refund if your appeal is sucssesful.

 

My OH went to court in Sept a few years ago and was ordered to pay £3000 then a month later received a letter from HMRC that he had overpaid by £3000. He had to wait untill the following April for his refund:mad:

[noogie]

circumstances are we purchased a business. The business was a block of flats and had the chance to purchase freehold, which also included 2 sops underneath the flats, Consulted with Inland rev advised to purchase leasehold, so we did but left the 2 shops alone, took a business loan and had business bank account with businees chq book etc. Employed an accountant and submitted and paid taxes ontime. So far so good. All taxes accepted and 4 1/2 yrs later sold business. During ownership hubby was resident in the flats in excess of 2 yrs. Business sold in 2003 and again tax accounts submitted and accepted and tax paid. 2 yrs later I R stated they had completed a random check of accounts and decided that this was not a business but Investment. therefore liability capital gains tax.Now want in excess of £57k and rising. Have had visit from tax Inspector at our request, stated due to certain circumstances he was recomending to write off and also told same to our representative. Now denies saying this coerced us in signing an agreement by saying we needed to admit we owed it inorder for him to write this off. Then prompyly denied everything and we started again.We can prove he lied but our complaints have fallen on deaf ears, Will not give us an oral hearing. Kept sending self assessment forms to our last address accused us of not changing our address even though the Tax Inspector had sat in our home. fined us £100 for failing to return the form even though we shouldnt hav had it, wrote off the charge and sent another form. Stated my husband owes them tax from Invalidity benefit which was taken at source, I am PAYE now so they say they haveny had the correct form from me for tax code so I apparently owe £1400 (all lies as my firm state thaey notified them of my employment) They sent 2 collectors to our home who said we will get back to you in 2 weeks That was 2 yrs ago and have now stated it has been too long so they want to collect. Been called dishonest, every year at this time they send bankruptcy threat of distraint threat.Lose paperwork that they dont want to show, we want our life back, have paid all we owe.

Now they want Income and expenditure as they think the house has gone UP in value. They live on Planet taxland if they think that. They are rude on the phone make you feel like something they have picked up on their shoe. Can anyone advise re Income & Expenditure.

Feel like walking away from house saying here have it Will fill plastic bag with air and let them have the air I breath because until they have driven you down they woun stop.

We are right and they must now admit they are wrong for once

Sorry if spelling mistakes but getting frustrated and upset again,

[hungrybear]

A lot of questions, all MAY be important - if you dont want to answer one that's OK and only give approx figures and dates.

 

Where you sole traders, partners, LTD?

 

When in the tax year did you sell?

 

What did you do with the profit from the sale:

a) before the end of the tax year in which you got it

b)at all

 

Did you / how did you account for him living in a flat?

 

How many flats were there in total?

 

What was the approx:

a)annual t/o of the business

b) annual profit before tax

 

Did you retain profit in the business or take it all as drawing?

 

Where you VAT registered.

 

Was the business sold as a going concern ie the sitting tenants etc?

 

Some advice from experience: If you get into a he said she said argument with HMRC you will not win. Save you energy for the facts.

[noogie]

It was our business in our names, we managed the flats for 12 months and seemed a good business so we had the opportunity to buy them a with the 2 shops included freehold or without the freehold(leasehold) on advice of IR

 

We bought in 1998 and sold in 2003 sept

 

we bought static caravans end sept 2009 having confirmed our tax was ok and were told 3 yrs to roll into another business and have have taper relief and tried the holiday lettings (lost money and caravans as you know depreciate,

 

Never really accounted for him living in the flats although we had utility bills electrich etc. He lived in the flats he was doing up as they were under enviromental order when we bought the business. He lived there for security reasons and some domestic reasons in total just over 2 yrs

 

There were 16 flats in a block

 

T/o was app 40K every penny went into the upgrades. we often had to put money in to meet the business loan so we coulddnt take a wage. Loans were secured against our res home and paid for things on our own credit cards

 

Local tradesmen carried out some of the work under supervison

 

Sold business as going concern and it had 80% of the flats occupied

 

Although business building was leased the freeholder was responsible for roof down pipes guttering and drainage. The freeholder insured the business together with the shops as one building

 

Urgent now as IR written for income outgoing are they entitled to do this whilst with Parliamentery Ombudsman

[noogie]

In addition to the above they have written today for income outgoings and AGAIN mentioning Insolvency. They have scuppered IVA for 42p in the pound 2 yrs ago and now threaten this when I could lose my job and hubby doesn't work why would they do this to people and get nothing.

Is it a punshment for trying to earn a living and actually challenging them.

They dont like it do they

[newton]

HI

 

It seems very true that the Inland Revenue have indeed more power than the police but one thing to remember is that they are paper shufflers, keep your nerve and leave sending replies to the very last minute and send these in writing and recorded delivery

 

Send them correspondence and answers and proposals they are duty bound to listen and to reply within reason, they are after all human beings and only so many of them are employed eventually increase employees thereby making the collection of the taxes unjustifiably expensive, at the moment a lot of its controlled by computer, computers dont go on holidays but HMRC employees do.

 

Personally I feel a lot of people have been paying taxes quite fairly but in recent years the HMRC have introduced performance targets and checks knowing full well that it will generate extra revenue which it seems is what its about.

 

The status quo has gone far far too much in their favour and in particular since the merger of inland revenue and customs and excise (a sneaky way of giving the inland revenue extra legislative powers)

 

Now that the government bigwigs and bods have effectively been stung on the a*** with expenses etc its down to us and our representatives to lobby against the legislative powers they have, thats the only thing that will change, in the meantime you I and Joe public are fair game

 

Please dont give up it will not make one iota of differance to them but what will is making appeals and disputes at every and all levels

[noogie]

Thanks for that. You see we also have problems and as stated 2yrs ago were thinking of IVA which they scuppered |HOWEVER I have successfully challenged and won the removal of one charge on my home, i am now challenging the validity of the other 2.I am the little man on the street that wont roll over. If they do wrong to me I will pusue it.But if they make me Bankrupt then I wont be able to rectify what the other little cretins have got away with. Given time I could remove all charges but feel they may scupper this too. I would love to lobby for this

[newton]

Make the bar stewards work for their money

 

Giving up is too dead easy for em, learn the system and make em work, they are only civil servants and as human beings we all sometimes make mistakes, play sneaky, use tape recorders hidden, in briefcases etc to get them on record. arrange personal meetings in order to do this

 

Its too easy to fob you off or tell lies over the telephone

[hungrybear]

It was our business in our names so partnership yes?, we managed the flats for 12 months and seemed a good business so we had the opportunity to buy them a with the 2 shops included freehold or without the freehold(leasehold) on advice of IR

 

We bought in 1998 and sold in 2003 sept

 

what was the PBT in the last year?

 

were you vat registered ? it makes a difference

 

what did you do for five years / what did you live on?

 

we bought static caravans end sept 2009 having confirmed our tax was ok and were told 3 yrs to roll into another business and have have taper relief and tried the holiday lettings (lost money and caravans as you know depreciate,

 

are you sure about this with a 5 year gap?, who gave you the taper advice?

 

Never really accounted for him living in the flats although we had utility bills electrich etc. He lived in the flats he was doing up as they were under enviromental order when we bought the business. He lived there for security reasons and some domestic reasons in total just over 2 yrs

 

There were 16 flats in a block

 

OK so at least a 16th of the annual profit could be income and arguably a 16th of the sale profit capital

 

T/o was app 40K every penny went into the upgrades. we often had to put money in to meet the business loan so we coulddnt take a wage. Loans were secured against our res home and paid for things on our own credit cards

 

right so you made a loss, every /most years? approx how much and what was the approx profit on the sale.

 

- i ask because there is a possibility you can set one against the other.

 

 

Local tradesmen carried out some of the work under supervison useful for proof of lose but doesnt really change much

 

Sold business as going concern and it had 80% of the flats occupied

OK that's good

 

Although business building was leased the freeholder was responsible for roof down pipes guttering and drainage. The freeholder insured the business together with the shops as one building

 

Urgent now as IR written for income outgoing are they entitled to do this whilst with Parliamentery Ombudsman

 

Right this is a bit of a rock and hard place thing. I think from the limited info so far that they are arguing investment because the business was not a going concern; ie according to you tax returns (i'm guessing 'cos you havent said) you made a loss or negligible profit every year. is that right?

 

So the 'running of the business' was purely to increase the capital value which on disposal you took as personal profit

 

how am I doing, all guess work?

 

so in september 2003 you got a big fat cheque for £xxx and then you did what with it

 

that's as far as I can go. The crux is what you did with the proceed IMHO between sept 2003 and april 2004

[noogie]

Hi babe

Will answer your questions as well as I can.I have nothing to hide I am honest

Business in name of me and my husband

Bit dull but profit was little paid approx 3k per year final

payment was about 5k according to accountnat as we sold business

No not vat regustered at any time

Slip of my fingers on key board I am angry We sold 2003 sept and also that is when we bought the caravans.

Taper relief advice given by yes youve got it Inland revenue

We very often kept the business afloat with private pensions just to make the business loan payment,

Being 100% honest in hard terms bought for £150k sold for £300k sounds good but please remember we paid for goods out of our private pension and credit cards. loan secured against our home.

Classed as a business loans as a business accounts as a business IT WAS A BUSINESS, Inland rev state Grey area. (EXPENSIVE GREY AREA FOR US)

\Even our accountant who was well respected accontant was unsure.

Plus before we spent any money we contacted I R to seek advive.This is when they said all ok roll over into another business.

 

We have just received phone call asking for income /expenditure hubby told them write to us as we cant trust them with calls so they said ok they wouild write,GUESS WHAT letter received stating in writing they will call Monday for INcome etc Is it us being dull or them

If IR reading this WE DONT TRUST YOU PUT IT IN WRITING but there agin it doesnt matter yous still twist words

[hungrybear]

Only fair I tell you a bit about me. Phd Scientist, now running my own business having run about 4/5 business over the past ten years. Always done all my own accounting. Successfully taken on the tax man 3 time by quoting their own rules back. I have no specific experience in your business areas but will give you the advice I can in general business terms - my business are/have been in the IT and recruitment sectors.

 

their argument is that your capital gain was disproportionate to the t/o and that you pretended to be a business to avoid capital gains and benefit from a higher rate of taper relief. It would be a lot easier to see them off if everything had / is ltd. And I presume they slapped you with a 20% bill for half each or did they go for a higher rate? I'll say more below.

 

calcs below based on 20% CGT and no personal allowance (8k each) to keep it simple.

Hi babe

Will answer your questions as well as I can.I have nothing to hide I am honest

Business in name of me and my husband at least you get double allowance!

Bit dull but profit was little paid approx 3k per year final when you say paid do you mean drawings or tax bill?

payment was about 5k according to accountnat as we sold business tax or capital gain? this is LOW even with taper relief I make it nearer 10k

No not vat regustered at any time brill only one set of accounts to worry about

Slip of my fingers on key board I am angry We sold 2003 sept and also that is when we bought the caravans. so you re-invested in the same tax year. Did you buy a site or just caravans?

Taper relief advice given by yes youve got it Inland revenue. so they gave 5 years taper relief - 75% taper relief and now they are saying only 15% (5years non business) so you paid 5% cgt as a business and now they say 17% - yes? so they want 12% of £150k = 18k SO WHERE DO THEY GET 57k FROM??? at most with penalties it should be 20k. or is the rate higher than 20%?. Also was it before april 98 you bought - that would give you indexation relief

We very often kept the business afloat with private pensions just to make the business loan payment,So did you post losses? and/or offset at the time of sale?

Being 100% honest in hard terms bought for £150k sold for £300k sounds good but please remember we paid for goods out of our private pension and credit cards -which you claimed relief on? if not you still can. loan secured against our home. I know what you mean but thats not relevant.

Classed as a business loans as a business accounts as a business IT WAS A BUSINESS, Inland rev state Grey area. (EXPENSIVE GREY AREA FOR US)

\Even our accountant who was well respected accontant was unsure.

Plus before we spent any money we contacted I R to seek advive.This is when they said all ok roll over into another business. all on the phone I bet?

 

Yes it is a grey area and they are short of money. I've just had a threatogram about my offshore account in Guernsey which is 100% legal!!!

 

We have just received phone call asking for income /expenditure hubby told them write to us as we cant trust them with calls so they said ok good you can 'spin out' letters to a month at a time! they wouild write,GUESS WHAT letter received stating in writing they will call Monday for INcome etc Is it us being dull or them they have two hands, both of them size 9 feet! and neither know what the other does

If IR reading this WE DONT TRUST YOU PUT IT IN WRITING but there agin it doesnt matter yous still twist words yes only in writing

 

this is hard to sort out like this on a forum because it is very complicated and a tax accountant would want maybe £300 p/h!!! to help.

 

 

what have you said in defense so far?

 

I presume you have said we had a business we sold it and bought another business and during the process were giving the taper relief our business was entitled to when selling and buying another business. both businesses have been/ are a going concern.

 

What was their response to that?

 

Have they told you specifically which tax rules and legislative sections they are making the re-assessment under. IF not get a letter off this weekend. You want to know exactly which statutes - chapter and section you have fallen foul of in their eyes and why. You need this to argue against it. THIS BIT IS VITAL IF YOU DONT KNOW THIS THEN THERE IS NO WAY FORWARD. - if you want to draft a letter and post it I'll give you pointers if you like.

 

else its 'youve have to pay us 'cos we say so and we are bigger than you'

 

- do you make a living to ANY extent out of the current business?

 

-do either both of you have any other jobs?

- what sort of level of taxes have you paid in the last 5 years?

 

- If you were to realise your caravan assets would you make a gain/loss.

 

 

I all dealings with them you must stay calm and professional, i know its hard. In my experience if you ask enough questions they will eventually guve you the rope to hang them with - no guarantees though!

 

what does your accountant say and have you considered suing him?

 

thats all I can think off at 1am on a Saturday. I now have a 2mile walk to buy cigs - had best part of a bottle of wine so I have to walk.

 

keep your head up and keep as positive as you can. The more you believe and look for a way out the more chance there is of finding one

 

One last thing. The mob that you deal with about the I&E etc, they are basically debt collectors. We have to get the proper people dealing with this.

 

I would also consider a letter to The Business Secretary and your MP. Business Link may be able to offer advice as well.

 

speak soon

 

Paul

[noogie]

Hi

In response to the 1st bit when I said paid 3k per year I should have said that was the tax we paid . When we sold the business the accountant drew up the accounts and we paid £5k tax.

It was then that we asked about rolling into another business and the tax man said we could HOWEVER later during this saga the tax man said that taper relief had stopped about 4 weeks befor we asked (AUG 03) and that we had been given incorrect information again so therefore we shouldnt have rolled it over.

The caravan busines only lasted about 2 yrs but being small we didnt get more than a few bookings. so we lost and wound it up sold caravan at a great loss through depreciation. That years accounts are still with the tax man and we are waiting for the result of the enquiry on this and for the return of a lot of our paperwork.

 

A little bit about us.

Bothe retired Police. Receive pension each as retired on ill health hubby unable to work on invalidity, he tried going back but unable to do so and now back on invalidity.

I have returend to work and receive wage however could lose my job if IR pusue insolvency. Goos people but not it appears good at running our own business.

 

The tax inspector said he was writing this off and confirmed this to a third party (DMC) can be proved, got us to sign to admit in law they had a right to ask for it. He said he needed this as he could not write off what we didnot admit we owed.

I will write asking under what chapter and section we have fallen foul of but should I still give income expenditure or just this is whats in this is whats out no breakdown

I feel that they should wait for the outcome first.

[hungrybear]

Hi

In response to the 1st bit when I said paid 3k per year I should have said that was the tax we paid . When we sold the business the accountant drew up the accounts and we paid £5k tax. This is 5k tax in the t/o in the final year I assume

It was then that we asked about rolling into another business and the tax man said we could HOWEVER later during this saga the tax man said that taper relief had stopped about 4 weeks befor we asked (AUG 03) and that we had been given incorrect information again so therefore we shouldnt have rolled it over. even with taper relief you would STILL be liable for about 25% of the capital gains tax bill - did you not pay any CGT at all

The caravan busines only lasted about 2 yrs but being small we didnt get more than a few bookings. so we lost and wound it up sold caravan at a great loss through depreciation. That years accounts are still with the tax man and we are waiting for the result of the enquiry on this and for the return of a lot of our paperwork.Is it likely there will be a massive loss that year? If so you have the right to offset against other outstanding tax. I have done this - although the figures were somewhat smaller.

 

A little bit about us.

Bothe retired Police. Receive pension each as retired on ill health hubby unable to work on invalidity, he tried going back but unable to do so and now back on invalidity.

I have returend to work and receive wage however could lose my job if IR pusue insolvency. Goos people but not it appears good at running our own business.

 

The tax inspector said he was writing this off and confirmed this to a third party (DMC) can be proved, got us to sign to admit in law they had a right to ask for it. He said he needed this as he could not write off what we didnot admit we owed.

I will write asking under what chapter and section we have fallen foul of but should I still give income expenditure or just this is whats in this is whats out no breakdown

I feel that they should wait for the outcome first.

 

You need to tell them that you dispute that whole amount and that I&E is not appropriate until the dispute is resolved. Ask for the rules etc yes under which they made the ruling.

 

My take is that the tax / t/o clearly show that this was a going concern in that you made a taxable profit year on year. At the point of sale you should have been eligible for 5 years business taper relief on the CGT which is 75% - ie you would have only been liable for 25% of the calculated CGT.

 

Did you pay this amount of CGT - THERE IS NO ABSOLUTE ROLLOVER - it's a common myth BUT if you realize an asset you are liable for the applicable CGT at that time regardless of what you do next with the money. I made that roughly £7.5k - did you pay that amount of cgt?

 

The caravans then become a separate issue. However you should have the right to offset a loss.

 

If the caravan business folded in 2005/6 why are the accounts still with the tax man - surely the latest they should have been due is jan 2008 if after 5 april 2006.

 

I am beginning to think that you have been too nice with them about this you need to start getting nasty back. Getting angry will do no good that's what everyone does - they know how to deal with that.

 

you need to write and get then to explain EXACTLY what laws and rules they are relying on. At this stage all you've got is a 'we are the hmrc what we say goes so pay up'. That is wrong.