Taxman under fire over small firm crackdown

HMRC has been criticised for a project to check up on the tax returns of up to 20,000 small businesses.
There has been anger at a new project launched by HM Revenue and Customs (HMRC) to conduct spot checks on small businesses.
From April, HMRC plans to check the tax returns of up to 20,000 firms and inspect their tax paperwork.
Any firm unable to back up their tax return faces a fine of up to £3,000.
The Business Records Checks (BRC) project has already been piloted in eight areas. It was launched as part of the Government’s £900 million scheme to crack down on tax avoidance and evasion.
HMRC reportedly estimates that underpayment of tax by small- and medium-sized companies accounted for up to 50% of the UK’s ‘lost’ tax revenue.
But the crackdown has faced criticism from both Conservative and Labour MPs, particularly in light of claims that HMRC is owed up to £25.5 billion by large companies.
Following the widespread criticism, HMRC says it will hold a “strategic review” of the BRC project. It admitted that “the project would have benefited from more detailed consultation with tax professionals at an earlier stage.”
Goldman Sachs claim goes to court
Campaign group UK Uncut Legal Action served legal papers in the High Court against HMRC just before Christmas. The group wants a declaration that an agreement to allow a bill for unpaid tax on bonuses at Goldman Sachs to be waived was unlawful.
HMRC is also set to pursue individuals and companies it suspects of not registering to pay VAT.
It says that only 841 of a suspected 40,000 targets had come forward by 22 December as part of an amnesty that ended on 31 December.
However, in another blow to the beleaguered organisation, it emerged last week that almost two-thirds of VAT fines issued to small businesses by HMRC were found to be incorrect on appeal.
More: How to cut your tax bill | HMRC declares war on tax-dodging landlords
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They hang the man and flog the woman That steal the goose from off the common, But let the greater criminal loose That steal the common from the goose...
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This is all very well, but the inland revenue are every bit as if not more so, crooked than those they suspect and accuse of being so. I hae first hand experience of the underhanded tactics used by the IR when as a victim I would not give in and provide the ticks in the right box for them. The IR went on a decade of a fishing trip with me trying to stitch me up or catch me out. All they found in fact was that I had been over paying tax, due mainly to my accountants mistakes. The inland R after many years eventually admitted the whole fiasco was a pointless waste of time. for almost 10 years of hassle they offered me less than £150 in compensation. Claiming it was public money and they could not hand it out willy nilly. They even refused to pay my accountants bill which ran into the tens of thousands. That bill 100% had been caused by the IR. who had deliberatly sent us on one wild goose chase after another hunting for paper from years past, in the hope I would find it easier to just give in and admit what they were trying to stitch me up with, giving them, the ticks they needed to gain their targets. Once the IR admitted they made mistakes, to avoid compensating or, even just paying the costs they had caused The IR again used the clap trap about the money they have is public money. I pointed out that they never seem short of public money when they are paying out for The house of commons speaker to tart up his free flat, MP's expenses, Royal Weddings or first class flights for Cameron and his cronnies to name but a few area's where money is wasted that otherwise could be saved. What this country needs is a general strike by all the self employed. The whole place would grind to a halt over night. The self employed standing alone in their corner shop, have no voice or human rights against these shysters. All the self employed should all stand together united if these shysters come knocking. That might just make the government and its pension chasing pen pushers who live in their cosy everything excessively paid for safe jobs, realise just who, really funds their pay packets and for head's of the IR ( hundreds of them ) their lavish life style and fat cat pension. Maybe the IR might then realise that the real back bone of this country or, the people who really create the wealth etc. is not them, it is the very people they are planning to harras and squeeze even more. Those people the self employed are those Cameron and the IR should now be thanking for working upto 18 - 20 hours a day 7 days a week. Don't forget the self employed live or die based on what they create, they have no ( for example ) paid sick days to fiddle like the IR and government staff do. My advice if the IR come knocking forget your accountant and instead get together with others who are targeted. Fight the IR shysters united. from my experience what the IR take advantage of is the fact as a self employed person you are "one" whereas they have an office full of mates ready to join in on the kill. Use the internet to tell others you are being picked on and join forces to fight united. If in doubt always remeber the excuse MP's offered when it came to light they had been robbing the tax payers for years, what was it???? oh yes, they had made a mistake. Yeh right. Talking of MP's and benefits in kind..... Well we all know the one about the defence sec and his mate but.... Imagine a first class holiday in Burma for you your wife and all your work mates enough, to fill a chartered BA plane. Yes you all travel first class, no duty free searches or, hours in checkin Q's or hands up and shoes off at security. Even your lift backwards and forwards to the airport's are paid for. Ok this has to be a benefit in kind doesn't it ?????? Yes thats right, what would the IR revenue say if you or I, put this lot down as a business expense!!! Well for the answer we need to ask William Haig because he has just go away with it. William his wife, and all his work mates have just enjoyed all this at tax payers expense, and the whole thing will not cost William his wife or, any of his mates a penny. Instead each and everyone of us as tax payers are paying for Williams group holiday yes we pay for the lot, the trip will not go on Williams tax return as a benefit in kind to be taxed. and defo it will never used as an excuse to open an IR investigation as it would if we tried the same stunt. and, Cameron says we are all in to together !!!! wow are we?
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I agree with the above - the tax system is far roo complicated and it is just as easy to overpay than to underpay. As someone who was written to by a "Higher Compliance Office" 2/3 years ago and had my accounts checked (due to a slight error in filling in the form - easy enough to do) it is a frightening experience even if you are not guilty of anything and since that day I have tended to overestimate what I owe e.g. have not claimed for expenses that I possibly could have done. Over the years this will mean that I will have overpaid by quite a large amount. I did, by the way, find a year where I had actually paid too much tax but they said that it was "out of time" whereas, had I underpaid, it was not "out of time" (a bit unfair I think). I do not see why, if M.P.'s don't have to provide receipts for expenses, small businesses/self-employed can't be given an "expense allowance". If they use it too much they will lose money and if they don't they will save money and then just base the tax on the actual gross income. It is to the tax offices benefit to have these very complicated forms that are easy to make a mistake on and as they can then impose "fines" for any errors. Also it makes it harder for the non-tax experts to know if what they are told is correct. Small businesses and the self-employed want to stay in business so cheating the tax office isn't to their benefit - no businesses in their right minds (or very few) deliberately want to cheat the tax office as getting caught has grave consequences and personally I like to sleep at night but it is so easy to make a mistake on the complicated forms without wishing to. M.P.'s - make tax forms easy then you will have no mistakes and save money by not having to employ so many staff. It will also be much easier and less costly to see who the cheats are as well.
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05 January 2012