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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10225
Experience:  I have been practising for 30 years.
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I am being prosecuted by the Inland Revenue for trading

Customer Question

I am being prosecuted by the Inland Revenue for trading after I received notice to provide a security deposit. I did so based on the advice of my accountant who had spoken to HMRC and advised that they understood the position I was in and were happy for me to continue trading until the end of my lease, for which I had already given notice. It since emerges that my Accountant cannot provide proof of this, (although I have a written statement to prove this was the advice he gave to me). My solicitor informs me I will have to plead guilty, and requires an additional £1,000 to represent my mitigating circumstances in court. The Pubs Advisory Service are advising me to plead not-guilty and counterclaim against HMRC as they failed to enforce their own regulation EN226 with the Pub Company with whom I was held to the extension of rent from. I do not know what to do. I cannot afford to pay the solicitor another £1,000. Can I defend myself? Is there any advice that you can give me?
Submitted: 8 months ago.
Category: Law
Expert:  Nicola-mod replied 8 months ago.
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Customer: replied 8 months ago.
Sorry for the late response. I kept checking and this response did not come up, and neither did I receive an email. I only got this when I tried to cancel my question as I had not received a response. I do still need advice on this. I am extremely distressed by the whole situation and whilst I understand the technical response is guilty, it seems unfair that my accountant will not be called to give his side of the situation, or that two people can have the same conversation with totally different understandings of the outcome, and I am left alone to face charges by the serious fraud squad. There are numerous reasons why this has happened, and my solicitor is advising to plead guilty at the earliest opportunity as this will be better for me. He says I have very good mitigating circumstances and as I am only facing a fine (and a criminal record - which really bothers me), I should plead guilty and get this finished with as it is causing me so much distress. To continue will mean it will go to trial. I will then have to pay more for solicitors and I do not want to go to trial. The court date is the 26th July and I only found out that I have no defence (according to my solicitor) at the end of last week, so I have very little time to decide what to do.
Expert:  Nicola-mod replied 8 months ago.
We will continue to look for a Professional to assist you.
Thank you for your patience,
Expert:  F E Smith replied 8 months ago.

I will try to assist you with this. I am not a Beer Regulations expert (that is very specialised) but I can tell you how to deal with this in respect of the criminal court element. I am assuming that there is a regulation hidden somewhere in all these HMRC rules you do need to provide the deposit. I cannot advise you because it’s outside my sphere of knowledge regard to enforcement of EN226.

Firstly, let me draw an analogy. I’m exaggerating here to prove the point.

If a policeman tells you that although there is a 30 mph speed limit, you can do 40 mph and you will escape prosecution, and you get nicked by another policeman or community service officer with a speed camera or following you for doing over 30 mph, you are guilty. There is no defence because it is an offence of strict liability. You did over 30 mile an hour. Guilty.

You may have mitigating circumstances to be taken into account, because another officer told you could do 40 and you relied on that information.

If a deposit or guarantor is required by the Revenue for this, then you have to do so.

The fact remains you didn’t provide the deposit {albeit on your accountant’s advice which fortunately you have in writing) and therefore, whilst your solicitor is correct you must plead guilty (strict liability) you have a reasonable defence in the form of the advice and the letter from your accountant. It appears that your accountant got it wrong. I’m assuming your accountant is chartered or certified and not simply an amateur type book keeper.

There is absolutely no reason why you should not represent yourself and if you pay the solicitor £1000 for pleading the mitigating circumstances, you will probably find that the majority of the time you are paying for the service sitting around waiting in court. Although everyone gets called 10 o’clock, it could 4 o’clock in the afternoon by the time you get seen.

All you are doing is literally saying it how it is, but you relied on the letter from the accountant and you ask the court to take that into consideration when passing sentence.

The chance is that you will get a fine.

You then have a claim to make against your accountant for whatever this costume in respect of time, this advice, your solicitors legal advice, the solicitor representing you in court if you go down that route, and any other reasonably foreseeable incidentals pursuant to a conviction. That could be several thousand pounds in self although hopefully your accountant will have insurance to pay the claim. If not, you will have to sue him personally.

If the accountant were asking me the question about what defence he would have to your claim, I would give him similar advice to that which I have given you with regard to pleading guilty. He gave you the letter. The letter gave incorrect advice he cannot substantiate and as a result, you have suffered loss.

Can I clarify anything for you?

Please take a moment to look at the top right hand corner of the page and rate my service by clicking one of the stars at the top of the screen. It’s important you use the rating service because that gives me credit. It doesn’t just give me a pat on the head! All you need to do is press Submit. Thank you. If you still need any point clarifying, I will still reply because the thread does not close.

Best wishes.