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A taxpayer’s financial affairs can be complicated.  But HMRC can ask a never ending stream of questions that can make no sense, or seem to be irrelevant or ask the same question but in a slightly different way.  Enough!

HMRC “needs to be satisfied”

Understandable.  Don’t we all.  But satisfied to what extent?

I have often remarked that the English language is wonderful – it can say so many different things to different people, all at the same time.

In my opinion, if you put say 6 people in a room and read aloud a passage of say 100 words, you are likely to get at least 6 different interpretations of what was just said.

The same goes when facts are presented.  The facts are always the facts.  But is often how those facts are interpreted (by HMRC).

A case in point

A recent matter has required a taxpayer to explain how two tax avoidance schemes work.  The taxpayer didn’t know let alone remember as it all started over 10 years ago.  Yes, it was/is tax avoidance, specifically  a “loan charge” matter and yes, the scheme promoter has relocated to a sunnier climate.

The taxpayer could evidence the route of some of the transactions, the payment out (to a third party/bank) resulting in the receipt  into the taxpayer’s bank account (after fees were deducted).

But was there a Trust involved?  I don’t believe so.

Why doesn’t HMRC accept the facts?

There are “documents” for the first scheme to say that they were given to the taxpayer “by way of loans”.  But none of the documentation is complete.  Dates are left blank, amounts are left blank but the name, address  and signature of the taxpayer are there for all to see.

The loans are not secured.  The interest is rolled up.  The lender has no contact details (besides it name) and the lender has also relocated to a different sunnier climate.

Sound familiar?

And then as if by magic

Where matters become a little unbelievable (even for me) is when and how these loans were repaid.  A second scheme was used to exit the first scheme.

Whilst the dates and amounts seem to tie up to what little documentation there is, I am not persuaded they explain how the loans were repaid.

But there are numerous references to other financial institutions, trust companies and alike.  But they are just company names.  They are just “name dropping” to give the scheme credibility.  They do not specifically relate to any of the facts as they have been evidenced so far.

So what can be done?

There is little to be gained by asking the same questions over and over again.  The taxpayer has supplied everything they have and does not not “know” any more.  The scheme providers who would “know” have disappeared a long time ago.

HMRC have sought to treat any such loans as remuneration in accordance with their current briefing and seek tax, NIC etc..  Fine, the taxpayer will pay, begrudgingly admitted.

But taxpayers don’t like to pay for things they cannot do.  Enough!

Anyone seeking help can call me on 07979 313 010 or…

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