HMRC Investigation - The Book-keepers Forum (UK)

Shamus · Forum Moderator & Expert

RE: HMRC Investigation

confused74 · Veteran Member

Ahh Shaun, you are lovely.

I may or may not, depends on how disheartened I am when this is all over ! To be honest it would of been ideal now with the baby on the way as I could work around her, but I didnt know that when I agreed to go employed ...grrr... Isnt hindsight a wonderful thing !!

Anyway, thanks again for your help and now I know you are here, there is no way you are going to get away !!!

Mwah x

confused74 · Veteran Member

Well I have a little bit of an update... not much though.

Lady has phoned me and asked how long I have left in my pregnancy, I said anytime within the next ten weeks, lets face it, we never actually know when they are going to make an appearance, anyway, she has informed me she would like to resolve it BY then in order to not put me under any further stress....... I did point out that I am stressed now and the next 10 weeks wont actually make much difference and that any stress is not good for me or the baby. She laughed and said bye.

confused74 · Veteran Member

Hi guys and gals, well the letter from the Revenue has finally arrived dated 19th May, and if I dont agree I have to write back within 7 days... the 7 days are already up before I received the letter !! Tried ringing her but she isnt in the office again until tuesday.

Anyway the letter is full of errors so will be writing back to her today, I just wanted to say thanks for all your help and you have made the last few weeks bearable, Im still stressed out by it all but hey, must be nearly over (I HOPE ! )

The bank wont give me my daughters bank statements so I have to take her down to get them, imagine having to explain to a 12 year old why I need her bank statements !! that was embarassing.....

Thanks again.

Cheryl

confused74 · Veteran Member

Have written my reply to her notes, her errors have taken me 5 pages to correct !! so not too many then lol. I have been firm but fair and tried to remain courteous although it proved pretty difficult !

Lets see what she says now, I am sending all the other information she has asked for under seperate cover.

Will keep you lovely lovely people updated.

Thanks

Cheryl

Shamus · Forum Moderator & Expert

Cheers for the update Cheryl.

did the letter from the revenue give you any indication as to what the reasoning behind their case was or was it just notes from the meeting with you?

Hope that the lumps coming on nicely now and has appreciated a couple of weeks of slightly reduced stress levels. (Sure that baby just had an adrenalin rush though whilst you were composing your reply!).

Don't forget to photocopy everything before you send it to HMRC as if they don't like what you've written it will very strangely be lost! (ok, call me a cynic).

As always we're all behind you.

All the best,

Shaun.

Amanda · Expert

Shaun you took the works out of my mouth, photocopy everything!!!!! Like you say they can easily loose it or even get lost in the post.

Stardoe · Guru

Good idea to send everything recorded delivery as well (or signed for...whatever it's called these days). I have had so many things lately just never arrived! (Apparently).

Pauline

Rich · Veteran Member

Hi Pauline, just a quick word of advice for anybody considering sending important documents by post. I am currently working as a delivery postman and have noticed a drop of in security with Royal Mail due to changes in working practices (to many unchecked tempory workers etc.) The most secure way to send anything is by registered post, also known as special delivery mail (99.9% safe) as this is kept separate from other mail. Even recorded delivery mail is thrown in with all the other mail and merely highlights the fact that something of value may be inside.

Stardoe · Guru

Many thanks for letting us know Rich. I must admit I was a little shocked by your message! I would definitely keep copies of any important documents sent by post anyway, but thanks for the heads up!

Pauline

Don Tax · Expert

Best of luck Chery. I hope the Revenue accept your explanations and that it is all over soon.

This very thread might not do any harm if you need to complain or appeal. You have convinced lots of us of the explanations for the £1500 etc and I'd bet HMRC have read this thread. For your own sake, the tax on £75 or so might be a small price to pay by offering to withdraw a hotel claim for example unless you are utterly determined to fight that they were absolutely unavoidable expenditure. Beware, though, you might set a precedent on future Hotel/Travel/Meals claims. See link below.

Giving ground on something that might be debatable should be marked "Without Prejudice", and you can dig in your heels about the legitimate family gifts. In other words, you would be giving them opportunity of 'peace with honour'.

I would also include in such a written offer a polite request that they suspend their enquiry, for a month either side of labour seems reasonable, as you approach what is archaically termed 'confinement'.

http://www.businessdictionary.com/definition/without-prejudice.html

-- Edited by Don Tax on Monday 30th of May 2011 10:43:16 PM

confused74 · Veteran Member

Thanks everyone for your help and advice, I have keep a copy and it did go signed for, have learned my lesson lol.

I have to send my mums bank statements as well as a letter from her stating that the monies received were gifts.

I want this over as soon as possible as have already had a few false labour scares so I think the bump isnt happy.

I was firm but fair in my letter so I hope she doesnt take the hump, it was only the notes from the meeting that I received, but it proves she didnt listen as some of the things she has quoted are not even applicable to that year, for e.g she wanted to know why I hadnt withdrawn any funds to take on holiday, truth is we didnt fly out until 6th April 2010 and I used my debit card so all the transactions show after the year they are investigating, I told her this on the day but I think she just heard what she wanted to, same for my expenditure wanted to know all about my pets so I told her, she has included my 2 dogs that werent even born until 1st April 2010, and we didnt get until end of May 2010, again not relevant, its just full of silly inaccuracies that really frustrated me.

At least I have you guys on my side, thanks again for all the advice.

I hope the HMRC have read this post and learned from it !

confused74 · Veteran Member

Ive finally gotten all my bits together, I know its taken some time but we had a right nightmare getting bank statements from the Halifax.

Anyway, Im compiling my letter and Ive just gotten to the part where Im telling her I have written to my clients to ask their permission first before I pass the details over, anyone have any suggestions on how to word it so it sounds like I know what I am doing rather than her thinking Im just using it as an avoidance technique.... what are the chances of her getting even arsier (is that even a word). Can she demand the details... Im not sure !

Sorry to be such a drain on all your resources but she has promised to resolve this before I give birth but I dont want her doing a u-turn.

Thanks in advance for any advice

Cheryl

Don Tax · Expert

How did you get on, Cheryl
Tim

confused74 · Veteran Member

Wow, thats pretty fantastic timing Tim !!

I just popped on to say thanks to everyone for their advice !! Ive been in and out of hospital these past few weeks so really havent the best time of it, but guess what Ive just opened up from the postman ???

Its a letter to say that they are closing the investigation with no amendments !! How bloody fantastic is that.... just in time for the eviction date of 2nd august as baby is breech !!

Im sooooo happy and relieved and really wouldnt of had the confidence to stand up to these guys if it wasnt for all of you ....

Heartfelt thanks to you all xxxxxxxxxxxxxxxxxxxxx

Shamus · Forum Moderator & Expert

Excellent news Cheryl,

Just glad that we could all help and it's all over now.

Good luck with the eviction. I'm sure that after all this the little one will be popping out already a part qualified accountant!

kindest regards,

Shaun.

Don Tax · Expert

confused74 wrote:
Wow, thats pretty fantastic timing Tim !!
Wow thats great news. It might have been some sort of record how often your thread was read and replied to, so indeed we were right behind you. Bloody fantastic! How about using a photo of the little bundle as your avatar :o)

best wishes
Tim

aga · Newbie

confused74 wrote:
Anyway, Im compiling my letter and Ive just gotten to the part where Im telling her I have written to my clients to ask their permission first before I pass the details over, anyone have any suggestions on how to word it so it sounds like I know what I am doing rather than her thinking Im just using it as an avoidance technique.... what are the chances of her getting even arsier (is that even a word). Can she demand the details... Im not sure !

Cheryl

hi, Cheryl have you finally provided them with your client addresses ?

My problem is that Tax Credit Office want to know full names, addresses and phones numbers all of my clients.

I've already provided tax credit with my diary where was all dates i worked, all hours i worked, all money i received, also first name and surname of my client, and all other documents same one what Charley mentioned above.

And today i received a letter from tax credit asking me for full names, address and telephone number of all my clients.

" i need more information before i can make a decision on your claim. Please send the following to me by 2 nov 2012.

- full names, addresses and contact telephone numbers of all of your clients listed in your diary."

Is it ok with personal data protection give them informatin they want because Not all of my customers agreed to give their details. And i'm not really sure that i should do so at all. If i don't give this information do i loose my eligibilty to claim tax credit ?

ps. i'm a housekeeping (cleaner) cash on hand no recipt or invoices (so far), i'm running it from 1st april this year and is not as easy as I thought
Thanks Agness.

Shamus · Forum Moderator & Expert

So sorry to hear about your current plight Agness.

There is no doubt that the tax credits office is becoming a lot more careful when it comes to the self employed and company directors claiming tax credits. Universal credits on the back of RTI will make that even worse. (To the point where if self employed it might just be a good idea to give up on the idea of tax credits!).

From their perspective they cannot go on trust that what you are saying is the correct information as too many people have spent too long abusing the system so now they are finding that there is now public and Government demand that they need to verify that what people are saying is the whole truth.

From your perspective, them going to your clients may make your clients go away as they may not want to be appearing on HMRC's radar.

Cash in hand businesses will suffer from this and even tightening up business procedures will not stop them contacting clients... By tightening up businesses procedures I'm talking about your clients signing engagement letters and you issuing invoices and receipts for work performed.

To the best of my knowledge the situation is that they cannot demand your list of clients but if you do not give it then they are within their right to withhold tax credit payments as you are asking the country for money based on a set of circumstances that without the information cannot be verified.

As with IR35 it seems that the few that played the system are taken by the government as the norm putting the emphasis on honest business owners (I'm sure such as yourself) to prove their case and in doing so such could cost them their clients.

Government departments including the police always try to sound as though they have more rights than they actually do when demanding information. Some they do genuinely have a right to and other information they do not.

I would advise you to go along for a chat with citizens advice about your situation as they will be better equipped than myself to give you the right information and assistance. However, as a starting point I hope that trying to see things from the other side of the fence has helped a little in understanding the reasoning behind the Governments demands,

kind regards,

Shaun.

aga · Newbie

Thanks For Your Replay Shaun.

i have one more question, about my working hour,
if i'm traveling to my first client for 30 minutes then doing a job in an 1 hour and traveling to next client is next 30 minutes and doing a job in an 1 hour and then i get back to home again in 30 minutes, so what count as work, and what off this should be in my diary.
i'm traveling by bus but i did not include that as my expense

can anyone complain if i did a job in 3 hours but i get only 10 pounds for it ( it is below minimum wage per hour.)

Shamus · Forum Moderator & Expert

The general rule is that only time that is costed to the client counts as working hours so travel time would not count unless that time is paid for by the client.

Variances to the normal rule include time spent on your bookkeeping, or travel as part of your work (rather than getting to or from it), or visiting potential clients which have not yet formed a revenue stream for your business.

I think that you could have a good arguement for time spent travelling between the two clients but not the time spent travelling to the first client or travelling home again. (so in your example, only 2 to 2.5 hours of the 3.5 would count towards work but add to that 1-2 hours per week for bookkeeping and other business duties.

You should be claiming your bus fare against your business and also claim through your books £3 per week against your business for the use of your home as an office. Its not a lot of money and it's inclusion may create or extend a loss.

Minimum wage is an employed concept rather than for the self employed. A good many of us on here have days where we dream of averaging minimum wage for the hours that we do (and other days that balance things nicely).

HMRC will be expecting you on average to be paying yourself at least minimum wage in order for them to perceieve your efforts as a business.

That doesn't have to be immediately of course but there should be the potential to achieve minimum wage for the hours that you are doing so your costing needs to be on minimum wage * hours worked plus all expenses.

hth,

kindest regards,

Shaun.

Don Tax · Expert

aga wrote:
Thanks For Your Replay Shaun.

i have one more question, about my working hour,
if i'm traveling to my first client for 30 minutes then doing a job in an 1 hour and traveling to next client is next 30 minutes and doing a job in an 1 hour and then i get back to home again in 30 minutes, so what count as work, and what off this should be in my diary.
i'm traveling by bus but i did not include that as my expense

can anyone complain if i did a job in 3 hours but i get only 10 pounds for it ( it is below minimum wage per hour.)

Hi Aga, a non-technical point but if you were to be challenged by HMRC or other official body regarding expenses incurred, I would point out to them the fact that you're travelling so much for so little reward. You have my admiration and I don't think an official department would be too keen on testing if the general public sympathised with your point of view either.

As Shaun says, you should have no problem claiming travel costs between jobs.

best wishes

Shamus · Forum Moderator & Expert

Hi Tim,

I feel sorry for Agness as she must be being twisted in knots by the system at the moment. If she was closer I would take her under my wing for a bit of free consultation, advice and a business planning (who knows when these startups will turn into tomorrows Molly Maid!). Unfortunately Leicester is the wrong side of Brum for me so can only try and offer a bit of support from here.

Shaun.

aga · Newbie

hi, i like to say big thank you, i've noticed you have a huge knowledge, explained mi better then i expected and i know that i have to learn a lot.
I'm reading this forums other threads and i discover very helpful tips.

Rob-f58049 · Senior Member

Shamus wrote:

The general rule is that only time that is costed to the client counts as working hours so travel time would not count unless that time is paid for by the client.

Variances to the normal rule include time spent on your bookkeeping, or travel as part of your work (rather than getting to or from it), or visiting potential clients which have not yet formed a revenue stream for your business.

I think that you could have a good arguement for time spent travelling between the two clients but not the time spent travelling to the first client or travelling home again. (so in your example, only 2 to 2.5 hours of the 3.5 would count towards work but add to that 1-2 hours per week for bookkeeping and other business duties.

[...]

Shaun.

Out of curiosity, why would the travel in between clients count?

What if the travel in between clients was just back to home to pick up the stuff for the new client and drop off the stuff for the old one, then straight out again with no home-related stuff done. Would that count?

What if the route between the two clients went past your house (e.g. because they're all on the same bus route) but you didn't go into your house? Presumably that *would* count?

Bah, awkward questions! (-;

MarkS · Expert

I would claim for any travel for business purpose. ie travel between your home and clients and travel between clients.

What I wouldnt claim for would be travel between home and your office (if you have an office that is separate from your home).

Would likewise to above I would claim any travel between office and clients.

Regards

Mark