HM Revenue & Customs (HMRC) is extending the Alternative Dispute Resolution (ADR) tax trial which provides Small and Medium Enterprise (SME) customers with an alternative way of resolving tax disputes in compliance checks.

ADR involves an independent person from HMRC (called a ‘facilitator’), who has not been involved in the dispute before, and who will work with both the customer and the HMRC case owner to try to broker an agreement between them. ADR has proven to be an effective way of resolving tax disputes in a quick and efficient way, not just for tax but in the commercial world as well.

In this stage of the trial, ADR will be available to SME customers, where a tax issue is in dispute, but before an appealable tax decision or assessment has been made by HMRC. Initially this stage of the trial will be limited to customers based in North Wales and North West England.

ADR covers both VAT and direct taxes disputes, and entering into the ADR process will not affect the customer’s existing review and appeal rights.

This employment tax expert says, be careful this is not for everyone. The example situations provided are where HMRC would probably get their backsides kicked if it went to Tribunal, so it will wrap up a case quicker BUT there is the other side of the equation as well and remember this is only open to 2 areas. If you find yourself in this situation, call us today on 0800 917 9176

HMRC has warned Employers about silly mistakes on their PAYE/NIC/Payroll end of year forms

In 2009/10, more than 500 PAYE forms incorrectly claimed to employ A N Other, 128 staff were entered as Mr, Ms or Mrs Dummy, and 40 employees had apparently reached the grand old age of 200.

Nearly 600 employees had surnames that included the letter X, while 75 had the surname ‘casual’. Other surnames included ‘worker’ and ‘student’. A large number of employees were simply referred to as ‘unknown’.

Jim Harra, director of customer operations of HMRC, said: “Most employers get their PAYE returns right. The few who do not cause problems for their employees, for example, incorrect deductions of tax.

“Around 80% of errors in employee data are due to an incorrect name, date of birth or national insurance number – straightforward information that can be collected and checked quite easily.

“So, whether employing ‘Mr or Mrs J Smith’ – or even ‘Mr or Mrs A N Other’, please use the full and official name on PAYE paperwork.

“First names are very important, especially for common surnames. We really want employers to check that they are sending us the right details for all their employees, to make life easier for them, HMRC and their employees.”

and just remember the stick that goes with is message is that of PENALTIES, you have been warned

This employment tax expert warns all readers of the increased use of the Proceeds of Crime Act 2002 (PoCA) by police and government agencies that has been highlighted by the recent case of Kishor Doshi, director of Sunderland accountancy and taxation firm Otax, who is now facing a custodial sentence after being found guilty of tipping off a client about a police investigation.

According to the Sunderland Echo Doshi admitted he rang and told a client that his office had received a police order commanding him to hand over the man’s accounts just hours after he discovered it.

The order relates to a money laundering investigation by Northumbria Police’s Economic Crime Unit – called Operation Galapagos – into the dealings of the client.

Doshi told the hearing at Newcastle’s Moot Hall that he did not know the Production Order related to a criminal investigation and was supposed to be kept secret by law. He claimed he thought it was part of an ongoing civil inquiry that his client had a right to know about. The accountant of 23 years told the court he only read the first two paragraphs of the Production Order before he made the first in a series of phone calls.

This is, for those of you who are unaware, an offence under the PoCA 2002

Sentencing has been adjourned until next month.

The Time to Pay arrangements that have helped many a business struggling with cashflow may be a target for cutbacks in the Budget next week. There have already been moves to place restrictions on those wishing to delay payments in respect of £1m by placing requirements on these companies to be reviewed by one of a panel of approved accountants, these then provide a report to support or otherwise the companies claims. However, this latest rumour could cause a lot more problems with the economy still fragile but in order to get this into context, this employment tax expert must also state that they disagree with time to pay arrangements for PAYE, VAT and CIS deductions – controversial you may think but pause for a moment – this money has never belonged to and never will belong to the company, the Company is simply an unpaid collector of taxes and the payments should definitely not be part of Company cashflow. This apart Corporation Tax and Self Assessement tax should still have a strictly controlled ability to apply for time to pay arrangements as this could mean the difference between companies staying afloat and getting through the recession and folding. These latter points cannot be underestimated, so long as the company in question represents something that is a viable proposition, so fingers crossed the sweeping rumour that Time to Pay arrangements will go unilaterally is just that … a rumour!

You may recall from earlier posts the concerns raised over HMRC and their report on “lost” revenue and people paying the “right” amount of tax – well tax investigations, employer compliance visits, tax enquiries have all now taken a sinister turn as it has been announced (via a Parliamentary answer) that HMRC are using anti-terror laws to spy on those suspected of not paying the “right” amount of tax. 5492 requests were granted to HMRC officers under the Regulation of Investigatory Powers Act (RIPA) 2000.

The RIPA powers enable officers to watch or follow suspects, and use informants to snoop on them. The statistics indicate that the number of cases in which HMRC has used the anti-terror powers has increased by approximately 75% in the past four years.

The concern here is that these powers are used as a weapon of first resort and not what they were intended for. We have all heard before about these powers being abused by councils across the land, spying on householders and their dustbins, dog fouling, school catchment area claims etc – so watch out, you don’t know who may be watching you or someone you know!

So we have the pre budget report today when we theoretically find out the true scale of the national debt and what the government propose to do about it. However, as always seems to be the practice these days, it’s not just a question of looking into a crystal ball but also doing a bit of brain trainer to recall exactly what was mentioned previously that will also be brought in now – following this so far?

In yester year we used to just have a Budget and that was relatively straight forward but now we have the PBR which allows whoever is in power to map out their budgetary vision for the next x number of years. However, this time round this has been blown out of the water somewhat by the fact that we are due an election in June 2010 and David Cameron has come out and said he will have another Budget within 50 days of being in office – still following?

So pin back your ears today as there may be more to this one than meets the eye. For all you practitioners out there we know the devil is in the detail, pages and pages of it in fact to wade through in order to get past the smoke and mirrors but the bottom line is a really interesting point – pre election budget v. the prudent protector of our economy (where we are all in this together and we all have to make sacrifices – yeah right, anyone forgoing their £m plus bonus – hardly think so,  let’s completely muller SME’s, working/middle class etc as usual) and this employment tax expert for one gets well hacked off with the smoke screen of “green” issues – saving the planet or an excuse for increased taxes – mmmm that’s a difficult one

Carry on watching for updates ….

And now for something completely different. Let’s face it we all need a break from the constant doom and gloom and last night I went to watch a fantastic show “Dancing in the Streets”. This was Motown at it’s best and there was such a brilliantly diverse audience made up of every age range possible yet they all had one thing in common – for a couple of hours they were completely absorbed into the show and transported back to the 60′s. We had a group of teenagers sat behind us and it was just amazing listening to them, they thought they were brilliantly cool knowing the songs and they were amongst all these older people – I mean what did these old timers know about this music – well if anything optimised how to bring all age ranges together it was this show and society should take a note of this – when everyone started getting up dancing and singing these kids were genuinely amazed (albeit there were a few dad’s dancing at a wedding routine but guess what they couldn’t care less they were enjoying themselves) and went with the flow, you had to be there to see the theatre rock it was truly something special.

Now on the subject of perception of age – wait for this classic – you know what it’s like you’re in the office and someone starts a coversation about middle age and when this era starts. Well we had been saying that compared to our parents and grandparents middle age was something that happened a lot later these days – oh how wrong you can be – in walked my new admin assistant who has just turned 17 and when asked when middle age started she announced 30!!!

Yes that’s right – in this era of doom and gloom both employers and employees can save a lot of money and not be tied to ever increasing car benefit and car fuel benefit charges simply by looking at how they provide cars to their employees. Don’t get confused with ever increasing taxation on these benefits, in the name of “going green/saving the planet, enviromentally friendly” it’s all crap – we’ve a national debt to feed and it’s got a monstrous appetite – remember this when it comes to the Pre Budget report.

So remove yourselves from this farce, it’s a fantastic idea, tailored specifically to your company and with HMRC approval, employees love it and even better you as the employer keep control and meet your duty of care and corporate manslaughter responsibilities.

Not come across it before? Thought about it some years ago but were a bit afraid of it – well those employers that weren’t have saved £millions – now don’t tell me that you wouldn’t be interested in that. So if you have a company car fleet or are even running a cash for car scheme and want to join the band of smiling employers and employees and find out more about employee car ownership schemes then call us on 0800 917 9176

So here we go, the start of how do we claw back the national debt, well what a way to start – removing tax relief from childcare voucher schemes – what message is that sending everyone!

and now we have the “if it’s not bolted down, let’s sell it approach” bearing in mind raising the retirement age and freezing civil service pay is only going to raise £4billion out of a total disputed debt of between £100b to £140billion – now call me slightly old fashioned but why the hell are we nit picking – where the hell are we going to get hold of £100 billion – well one place we’re not is from MP’s expenses. So we’ve had the compliance review and they are being made to pay back public money that they shouldn’t have had – or are they? Not these leaches – oh no let’s be angry because perish the thought we are just being picked on. What does it tell you when the unelected prime minister is paying back over £12,000 – that’s someone’s annual salary!

So just watch this space as more and more things are taxed, put into foreign ownership (don’t even talk about security issues attached to these) – where will the remaining debt payoff come from………………? well there’s an election next year – oh yes an election involving the self centred parasites mmmmmmmmm!!!

How refreshing that would be – taxpayers being able to charge “credit card” interest charges (when is this issue going to be addressed – 16%, 21% and the base rate is…) on those MP’s who are at it again – not satisfied with being subsidised to the tune of £6.1m per year by the taxpayer for their food and drink, it has been identified that some 77 MP’s have failed to settle their “tabs” for more than six months and to illustrate the point further in August 329 MP’s owed a total of £138,046 in entertainment and catering.

This raises a number of interesting issues about compliance procedures and compliance audits in general, for example:

• why do they have tabs, the rest of us mere mortals have to pay for our purchases there and then? These parasites are subsidised by us and still don’t pay – simple answer change the rules PAY AS YOU GO like everyone else!
• Why are they allowed to go so long without settling these accounts – because it’s an old fashioned gentleman’s club set up. Do you really think these details came voluntarily – no, it was from a Freedom of Information Act request

So we need a full independant tax investigation into exactly what is going on with these people because at the moment more and more of these issues are coming to light but not voluntarily it’s either by FOIA requests or whistle blowers – the whole sorry mess should be brought to account and these people treated like anyone else - tax enquiries into their affairs and police involvement if that is what would happen to Joe public