Contact was made with Gilbert Tax as an individual had received a letter from HMRC suggesting that they may have undeclared offshore income and suggesting that the tax affairs be reviewed and if there was undeclared offshore income that the individual took part in the Worldwide Disclosure Facility.
Having had a detailed discussion with the individual it was clear that this was a complicated case involving a number of years and both offshore and onshore errors. It was established that the individual did not know there were errors until the individual reviewed the tax returns following receipt of the letter.
In the interim we notified HMRC that Gilbert Tax were acting on this matter and as is Gilbert Tax’s standard practice, put HMRC on notice that we would be writing a detailed letter which would be sent with various supporting documents to enable HMRC to understand the disclose made online as this only allows figures of income, tax, interest and penalties to be shown on the form without any explanation.
We were engaged to deal with matters and the client decided he wanted to calculate the tax interest and penalties and then use this as the basis for Gilbert Tax to make a review and undertake the disclosure. The comprehensive spreadsheet was sent and the total liability per the client’s spreadsheet was over £103,000.
Our client had assumed that all of the errors in all years could be subject to tax and that as all of his income was from overseas sources (most of which had been declared in the UK) that errors relating to the expenses would be an error with regards to offshore matters and therefore that the penalty would be 150% for all years.
Using the experience of dealing with hundreds of Worldwide Disclosure Facility and of the rules relating to penalties and the years that HMRC can assess it was demonstrated that for some years HMRC could not ask for the tax as they had no power to assess it and also that the errors in the expenditure were not an offshore matter and therefore would only incur penalties of 20%.
In addition there were some expenditure which the client did not realise he could claim and that could be claimed as part of participation in the Worldwide Disclosure Facility.
A detailed letter was sent to HMRC putting forward all of the relevant technical points and explaining the errors in detail and how they had occurred, along with sending basic information like tax computations.
HMRC agreed with Gilbert Tax’s conclusions and the final amount paid to HMRC was approximately £12,750. As the final bill was significantly below what the client expected to pay he decided to make significant payments to various charities.
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"We understand that people sometimes make mistakes in their dealings with HMRC and that HMRC make mistakes in dealing with taxpayers. Many people do not know how to deal with HMRC or who to turn to for help resolve the tax dispute.
Our firm of tax advisors specialise in resolving people's problems with HMRC. We have extensive expertise in dealing with all forms of tax investigations and tax disputes as well as with taking matters to the Tax Tribunal where agreement cannot be reached.
We deal both directly with the individual who is under enquiry and also work with many firms of accountants supporting them in dealing with HMRC disputes and advising them on how to handle HRMC to get the best result.
The fact is that proper management of HMRC is the best way of reducing the tax, interest and penalty as well as the time taken in resolving any tax dispute.
Our expert team are none judgemental and rigorously defend your position within the scope and parameter of the law. We take control and manage the process to minimise the interruptions that any form of tax investigation causes to an individual's life and business."