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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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HMRC issued a tax assessment which i am appealing at a tribunal

Customer Question

HMRC issued a tax assessment which i am appealing at a tribunal and representing myself.
The revenue have not produced any evidence about my income i had done all my return. They have only produce a written statement on hear say and have not submitted any evidence. Can the revenue make assumption without backing it up, or issue assessment just for fun. I have on legal back ground and not in a financial position to employ tax specialist. They are arguing that I was a shadow director of company, with no evidence. I would be grateful if you can give me some advise on what I should say the any tribunal hearing
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
HMRC are very good at making assumptions and in my experience these are invariably incorrect. My late ex Father in law received a string of letters from the then Inland Revenue asking if he had fully declared his income. After a number of these he testily responded that he was not very good at guessing games and would they please come to the point. It transpired that a third party had received a substantial sum for him and when investigated by IR told them that 'Les had given it to him.' Indeed he had, but what the IR totally failed to take into account was that Les was the executor of a will! IR had, naturally, assumed that he had undeclared income of which to dispose! I also attended a meeting with an Inspector who demanded immediate payment in cash of Income Tax which was not even due. Needless to say he got short shrift and his antics reported to his superiors who immediately repudiated his stance.
So what to do? Firstly ensure that your tax return was accurate. Secondly what is this company of which they claim you are a shadow director? Are you maybe a shareholder or maybe nothing to do with it? They must come clean before the tribunal, indeed to you before the hearing, and you can always ask for an adjournment if they are presenting gibberish on the grounds that you have no forewarning of their antics. They cannot just produce evidence like a rabbit from the magician's hat. It costs you nothing to request an adjournment, but it costs them departmental time and egg on their face.
I would still be inclined that you demand that HMRC come clean on their position before the hearing. It may be perfectly simple and they may well have got hold of the wrong end of the stick, if they have even found the stick at all!
Your initial approach should be not to say anything and let them present their case, if any. This can then, I trust be refuted.
At this stage this is the best advice I can give, but I am not a lawyer, although I have some background in criminal law, I am merely an accountant and a Chartered Secretary.
I do hope I have shown you a way forward in this matter.
Customer: replied 2 years ago.

Thank you for your response, this not a criminal matter, I have never been a director or a shareholder of the company. allegation is that i had been paid cash by the company, which not true the company that employed me was a property company and did not deal in cash. i am under pressure to produce my evidence i am unable to produce and documents because the company that I worked for is gone into administration. Are you aware about the Tribunal procedure or what I can so to find this information. what is the burden of proof that is required by the HMRC or if you have any legal president regarding this.

Expert:  bigduckontax replied 2 years ago.
I will respond in a few moments. I am a diabetic and just going through my pre dinner insulin routine. Please bear with me.
Customer: replied 2 years ago.

No problem I am also diabetic.

Expert:  bigduckontax replied 2 years ago.
Right; HMRC's stance is that you received emoluments from a company now in liquidation which have not been declared for tax. As you may be aware a director of a company is an employee per se and must receive any income from that company under the PAYE regime. If you have received emoluments from this source did you declare it on the appropriate self assessment Income tax return? If you did so then HMRC do not have a leg to stand on. You have received income which you have properly declared.
For further evidence you should approach the receiver appointed to liquidate the company in question. It may be the Official Receiver or some other Insolvency Practitioner. Frankly, I do not hold out a great deal of hope with that approach, but it is the only realistic one in this situation. It is for HMRC to produce their evidence of undeclared income, not the other way around.
When you were discharged by the insolvent company the insolvency practitioner should have issued you with the relevant documentation, P45 etc as well as a breakdown of all income distributed and tax and NI deducted.
Customer: replied 2 years ago.

HMRC allegation is that I had been paid cash by the company, which is not true the company that employed me and I was on PAYE which I have declared and have provided them with my bank statement.

Kamlesh.

Expert:  bigduckontax replied 2 years ago.
If you have declared all your income of your return Kamlesh then HMRC have no case unless they can prove that you actually received cash which you did not disclose of which they must produce hard evidence, not mere tittle tattle or scuttlebutt rumour. Naturally they will take a position that cash would not be reflected in your bank statements, but so what. They need better evidence than that in my opinion. I trust that you have maintained tax files to support your position.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3119
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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