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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a problem regarding a so called tax on the proceeds

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I have a problem regarding a so called tax on the proceeds of two separate auctions who seem to provide me with a decision to pay tax immediately. I would have assumed I would pay capital gains tax but I am assured by people acting on my behalf that this is not so. They are asking for tax (items sold were rare earth metals) before the above proceeds are released.
I suspect they may be scammers but I am wondering whether a new unit has been set up under the recent HMRC MOVES TO CREATE 30 units around the UK to collect unpaid tax?
J. Price
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.
Please clarify for me...
You have sold some items of personal possession that would give rise to capital gains tax on the gain.
You have been told to pay tax before proceeds are released. Have you been told what tax is payable and at what rate...
It does not sound right to me...
Please expand...
Many thanks
Customer: replied 2 years ago.
Thanks, ***** ***** for the following as it gets complicated.
I invested in purchasing some rare earth metals (used in industry and not like precious metals such as gold and silver) in March 2013. My broker was trying to assemble 30 clients to make a large package suitable for export to a Japanese firm. He left and setled in with another broker firm and tried to get his deal finished but failed. Both brokers have now gone into liquidation.
His package of clients was picked up by a group centred at the large car plant at Burnaston three miles from Derby. It seems to have an address with the collections/finance part of the firm but not the manufacturing part. I have dealt with a young man who says he reports to managers since April 2014. I am not sure whether he is genuine or part of a team of scammers.
BUT I suspect his managers are trying to finish the deal in a way that would not show up in Toyota records (and perhaps make some money on the side). However, this is guesswork and I only know this Franklin as my contact. I have sent much money to him for various factors such as storage fees, auctions and so called HMRC TAX. The metals appear to have been auctioned for about £240,000 and I am told the proceeds will be sent to me if I pay a final fee of c. £5000 for the auctioners fee. We do not have this at present and my wife is against borrowing this sum. It appears I have paid a 'TAX'.
Now I just can not find anything about a tax on auction proceeds. It can be argued that I (and my wife) should be liable for Capital Gains Tax but this normally happens when one fills in the annual tax return. I also cannot see how atax could be properly be paid if no account is taken of the costs of acquiring the items in 2013.
I have a similar example where other metals have been sold at auction and the buyer has had £108,000 held up at Nationwide Bank for weeks and now held up because not enough tax has been paid. His advisor says a sum of about £4,000 needs to be paid before the large sum can be released to us. Some tax has been already paid.
You may be aware that the HMRC has or is setting up 30 units in the past two years to collect unpaid tax from a variety of professions and wealthy people. I am wondering whether I have fallen into one of the categories. But I can find no information on taxing auction proceeds ((we are not talking about buildings but investments and I am not a dealer but private investor ).
The simple question is are HMRC taxing auction proceeds soon after the event and where is there a contact address to get information? Should proceeds be considered as Capital Gains tax items. That's all I need for the moment as I may have to consider the national police fraud unit. I do not know if I am being dealt with by scammers and I just cannot find information from HMRC.
I have no contact with HMRC, do not know the rate of tax and matters have been handled by possible scammers. I may be wrong but do not have the information to base further decisions.
Whilst I am dealing with these projects my wife also has contributed to half the investments but is not mentioned in documents.
John Price
Sunday 8th March 2015
Expert:  taxadvisor.uk replied 2 years ago.
John, thank you for your reply.
It would appear to be a scam, I'm afraid. The sort of numbers you are suggesting as tax due before release of funds does not make sense. The brokers going into liquidation etc does not look right.
I am unable to find any special rules governing taxation of auction proceeds as outlined by you. One can understand a requirement to pay brokerage fee or some handling fee but these would have been specified in the contract or some agreement.
This may not be comforting for you but in my opinion it has the hallmark of a scam. You may wish to check with your local law enforcement force and report the case.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service - I'll be happy to respond. Please only rate my answer if it is acceptable to you.
Customer: replied 2 years ago.
THANKS,
I have two separate projects and yes they could both be scams. I have sent rather too much to ACTIONFRAUD but they are declining to take action at present. What I really want are the right contact points at HMRC.
I am in despair with this having written three times to the correspondence office of the Head of HMRC recently. Everyone says these could be scams and I am refusing to send any more money. I keep getting calls from some one who says he is head of this special HMRC UNIT who knows something but also calls me on a Sunday morning (yesterday) which either means he is really trying to extract tax for the good of the Chancellor or is up to no good.
With your experience can you suggest any good HMRC POINTS OF CONTACT? The trouble is, with the heavy loss of staff, phone calls can take an hour and letters one month for a reply. I just have the gut feeling that matters may be associated with the recent creation of thirty units in the UK to find unpaid tax. But where are they?
John Price
Monday 9th March 2015
Expert:  taxadvisor.uk replied 2 years ago.

John, thank you for your reply.

MY advice to you would be to write to your tax office and detail the issue. Making phone calls in my view is waste of time.

The benefit of putting it in writing is that your letter would have to be acknowledged and you will receive a response. Send your letter recorded delivery and retain a copy for future reference.

In the meantime, this would also enable you to register this loss on your tax return as capital loss on an investment, to be offset against future capital gains. Make sure you have supporting documents to prove your investment. Don't part with any more money.

I hope this is helpful and gives you some comfort.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.

Hello John

I notice you have viewed my latest response to your question about loss of money through likely scam and reporting of it to HMRC (</spanCustomerLast Viewed on 3/9/2015 at 11:23 AM).

Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

Customer: replied 2 years ago.
Thanks again and I have not forgotten you.
I agree with you on the telephone question where messages get forgotten. I did ring HMRC yesterday and after 45 mins made contact. Then after a further 10 mins with a technical specialist in the Lake District. He was a bit puzzled by the need to pay tax so soon after auction. There is information on the websites about how traders should perform at auction but nothing about how an investor (ie not someone consistently selling) should act with regard to taxing which I believe is a form of capital gains tax and is normally undertaken by the taxpayer annually.
I did also find on the web site an advert by accountants Chapman ,Robinson and Moore Ltd of Kidlington, Oxford who have a newsletter and mentions that 'HMRC ISSUED NOTICES TO ONLINE AUCTION SITES'
(11 May 2012). A Mr Alan Sowden seemed to be a contact point -
01865 379272.
I am writing to my HMRC tax point in Cardiff.
John Price
Tuesday 10th March 2015
Expert:  taxadvisor.uk replied 2 years ago.
John, thank you for your update.

I wish you all the best.

Many thanks