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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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We have had an investigation from HMRC and there are 2 issues. the

Customer Question

We have had an investigation from HMRC and there are 2 issues.
the first relates to an assessment of fees paid to an individual who was paid but was not on PAYE HMRC state that he should have been.
they have raised an assessment for £23751.96 my client has no issue with this but they state that a penalty charge will need to be considered.
A further issue relates to the Benefit in Kind on the accommodation which HMRC state is under review.
Can my client request that the assessment of £23751.96 be deferred until they have assessed the penalty and also the Benefit in Kind has been reviewed?
My client will need to raise funding to cover these and wants to have all matters completed prior to doing this?
Many thanks
David Scollay
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello David, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
My immediate reaction is why should he be paid under PAYE unless he was in the building trade and CIS applied or else a formal employee. Appeal the assessment in the normal way and demand an explanation from HMRC for their antics and tell them, albeit politely, to stick their assessment where the monkey puts his nuts.
However, if he was not an employee how can there be any benefits in kind? The whole thing depends upon whether he was actually an employee or not, a question of fact and HMRC must be required to substantiate their position. If we are not all careful every individual would be required to operate PAYE on their solicitor's or accountant's individual bills for services, ludicrous!
I do hope that I have given you some food for thought in this matter.
Customer: replied 1 year ago.
Sorry just to clarify the matters my client is the director of a Ltd Company, the Self Employed individual never raised an invoice for his services and went missing once the investigation started. My client accepts that he should have insisted on receiving invoices for the services supplied.
The issue with accommodation id that as the business is a Public House and part of which is Domestic which he has never used. This has been argued with HMRC.
What we need to know is can they demand payment of the assessment without advising of any potential penalties or without finalizing their review of the accomodation?
many thanks
Expert:  bigduckontax replied 1 year ago.
Yes, well that is a bit of a no brainer, but I still do not think that HMRC can enforce their assessment without evidence that that the payments to the absconder were fraudulent.
If he never used the accommodation how can it be a benefit in kind?
Yes, I suspect that they can try to force their assessment, but they cannot do this whilst an appeal is pending and this can be strung out for weeks or even months by asking for a reference to a tribunal.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your excellent support.

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