HMRC campaigns and the role of the agent

By Tolley in association with Guy Smith of inTAX Ltd
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The following Owner-Managed Businesses guidance note by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:

  • HMRC campaigns and the role of the agent
  • Introduction
  • The client wants to make a disclosure. Where should the agent start?
  • What should happen next?
  • What should the agent do if the client needs to make a disclosure, but is reluctant to do so?
  • What other practical steps should the agent consider?

Introduction

HMRC offers disclosure opportunities via campaigns for people to voluntarily put their tax affairs in order and become compliant.

Campaigns do this by:

  • identifying a specific group to target. Groups targeted so far include doctors, dentists, plumbers, electricians, tutors and fitness coaches.
  • identifying information and intelligence that can be used to encourage and influence that group to come forward. HMRC uses formal legislative powers to obtain details from third parties.
  • offering an opportunity to those within the targeted group to come forward and disclose understated income and overstated expenses on the best possible penalty terms
  • HMRC pursuing those who do not disclose at all, or who do so inaccurately, with a programme of action that can include criminal investigations

Campaign activity, including details of the formal powers used, is covered in the An introduction to HMRC campaigns guidance note. How to handle a campaign in practical terms is covered in the HMRC campaigns in practice guidance note.

The client wants to make a disclosure. Where should the agent start?

The objective should be to obtain as much background information as possible concerning the disclosure, with particular regard to the behaviour of the client which caused the error.

This is an important first step because the behaviour will determine how many years HMRC will expect to see included as part of the disclosure and the level of penalty chargeable.

HMRC considers four different levels of behaviour in these circumstances, namely whether the error giving rise to the disclosure was made despite the taxpayer taking reasonable care, or was made carelessly, deliberately or deliberately

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