HMRC

[Richard999]

Hi everyone

Does anyone know if the 6 year rule applies with HMRC ?

I have got into a bit of a mess with them due to being made redundant in 2010. I have been ticking along since then pretty much by the seat of my pants but I know I owe them money due to having a company car for a few years in my previous job which my employer never deducted tax for. I also should be paying some tax now on my self employed income but don't want to open a can of worms !

All advice welcome !

Thanks

Rich

[Never-In-Doubt]

Re: HMRC

No HMRC debts are never SB sadly. Some other tax related benefits are mind you, but not mainstream tax.

[Never-In-Doubt]

Re: HMRC

This explains HMRC policy in detail --> http://www.hmrc.gov.uk/manuals/dmbmanual/dmbm595080.htm

In England and Wales only, the Limitation Act 1980 provides that recovery action for debts should commence within six years from the debt becoming payable. But Section 37(2) of the Act excludes proceedings for recovery of tax or duty and interest on tax or duty thus there is no time limit for those debts.

[Richard999]

Re: HMRC

Cheers Niddy

Thanks for the info !

Best I try and get it all straight

Rich

[MrsD]

Re: HMRC

You just need to register as self employed for now, any tax due won't be due until 2015, loads of time to get to grips with your tax return and fill it in properly, you never know, they could end up owing you if you do it right

[SXGuy]

Re: HMRC

If you register now as Self employed, and say you starting working now, (not before April) then your first tax return will be due online by 31st Jan 2015.

The tax due and when to pay depends on your net profit, if your tax is over £1000 then there will also be a half estimate to pay by Jan 31st 15 as well as another half estimate July 31st 15.

If you earn less during that year then you can claim to reduce those payments on account.

But in all honestly, you should seek a decent accountant to deal with this for you.

In regards to Tax being Statue barred.

Yes and No.

Yes applies ONLY to if, HMRC had the info already during those 6 years but did nothing to act on it, only then could you tell them to shove it.

If you failed to notify them of any tax due, or you failed to pay the correct amount of tax due to inccorect information, then no, it isnt statue barred.

A Company car is a bit of a tricky one, ill tell you why, in theory, your employer would have submitted info to HMRC showing your company car, and the following year, your tax code would be reduced to pay the extra liability (paye works a year behind) yes you should also inform them of this, but techically they should have known) Thats not to say you can use this as an excuse though!

Please seek a decent accountant, you need him/her to check your P60's during that year and the year after, see if any tax was deducted by way of a reduced tax code, and submit the relevent paperwork to bring it in line.

If im honest, most of this goes over peoples heads, which is why i strongly suggest an accountant.

[garlok]

Re: HMRC

I should also like to point out that after taking a further serious look at the experiences of others within our circle both as sole proprietors and small limited company directors and the regulations, should the Revenue have any suspicion that things are not as they should be, (they are not required to have substantive evidence either) they may and do have the right to instigate an "in-depth" compliance investigation into your affairs and if they so choose they have the right to go back to the date that your birth was registered. It is an urban myth that they can only go back 7 years etc. I can name one ex colleague that this was done to and if you object it is taken that you are guilty by default and they may immediately place the matter before a judge at Tribunal level One to force you to co-operate.

This is unusual but it HAS happened. Niddy has posted the Limitation Act statements already and ALL tax is considered "mainstream" by the Common Law. If you think this is draconian and penal then take a good look at the VAT regulations and the powers of the Excise (now same department) concerning VAT.

My wife who is professionally accountancy trained being a Fellow of one of the institutions has had one very clear edict that she has followed all of her life that is:- "There are only two lots of people that you do NOT mess with in this world, they are HM Inland Revenue and Her Majesty's Customs and Excise (as they were)

regards
G

[SXGuy]

Re: HMRC

Garlok, while its correct they can go back as far as they like should they have a reason to, you are not required to hold any information relating to the business for the same length of time.

So if HMRC do decide (which is rare) to go back futher than 7 years, if they have nothing to base their claim on, they must make an assessment.

An assessment can be argued, and you can in most cases agree to settle at a reduced penalty.

[Never-In-Doubt]

Re: HMRC

look at Rangers FC

[garlok]

Re: HMRC

Yes SXGuy in principle you may be correct but please read exactly what I said in my post. They do have the right, and it is are for them to exercise it. You are commenting purely as I see it on a business aspect which is governed as well by the record keeping requirements of the Companies Act particularly the new one of 2006 enacted 2009. That is a requirement of the company holding 7 years worth of accounts and supporting documentation. This has been so for a very long time. What is recent is the requirement for ALL businesses, partnerships, sole proprietors, clubs, societies, associations, charities old Uncle Tom Cobley and all to also conform as they now fall under the regulations and requirements of Corporation Tax, (we hold copies of all of the booklets issued to companies for their guidance along with the VAT versions) However on the personal taxation front they CAN and HAVE gone back to a person's birth date, I know one, and we ourselves have just been through a compliance investigation this year although this was by random selection because one small thing which was proven to be perfectly legal and clean had not been covered in their monitoring software hence flagging us up as potentially having a taxation issue. With what we had to go through just to come up totally clean I am very glad that it was not an "in depth" version and their rights which I did discuss with senior officers looking after our case are seriously onerous on an alleged defaulter.

regards
G

[SXGuy]

Re: HMRC

That must have been dredfull, i would hate to have any compliance checks, the headache of it all is beyond belief.

The thing that i cant stand is their right to check peoples affairs for the slightest of errors which in the old days could be corrected by a simple phone call to an inspector.