August 10, 2022
Case Studies

A Selection of our Recent Cases ..........

Central England client - Source of Income

The client had made several errors within his record keeping and additions to profits in respect of these errors had been agreed with HMRC. However, there was a greater concern over Capital Introduced. The client had introduced over £70,000 of his own money into his business over a period of years but had kept little in the way of evidence to verify the source of this income. In the absence of such evidence, HMRC were seeking to treat this as undeclared income from the business.

Although there was minimal evidence of the various sources of the income we were able to put together a case for our client that ultimately resulted in total additional Tax & NIC of just over £1,000.  

East of England client - Capital Gains 

Following the sale of the client's business, HMRC disputed the accountants method of calculating Capital Gains Tax due. HMRC's method of calculating Taper Relief resulted in them seeking to recover additional tax in excess of £8,500.

We successfully argued the technical points and were able to get HMRC to use our alternative method of calculating Taper Relief which ultimately resulted in extra tax of only £400 being due.

North West England client - Business Economics

The client had kept poor records and had clearly made errors. His accountant approached us at the point where HMRC had carried out a Business Economics Exercise to recalculate profits and were suggesting undeclared profits of over £22,000 in just the Enquiry year alone. The Inspector was looking to apply similar adjustments for each of the five preceeding years and was therefore suggesting total undeclared profits in excess of £125,000.

We looked critically at the Inspector's Business Economics Exercise and found flaws that ultimately enabled us to argue that total adjustments should be restricted considerably. This limited the liability accordingly to just over £12,000.

South East England client - HMRC Abuse of Powers

HMRC opened an Enquiry into the clients Limited Company and immediately started asking questions about the director's property transactions in respect of his own home. The client's accountant approached us when the Inspector was continually asking questions about the director's private affairs even though there was no evidence of any significant issues with the company accounts to justify such scrutiny of the private side.

After advising the Inspector of our involvement and pointing out his abuse of the statutory powers available to him, the Inspector immediately agreed to cease his questioning of the director's private affairs, therefore preventing the client from undergoing a long ,drawn-out (and potentially costly) review of his personal finances.

South West England client - Negotiated Settlement

Client had prepared and submitted Tax Returns himself and only engaged the accountant late in the day. The accountant had dealt with most of the case and the various issues were already agreed in principle. The Inspector was looking for a settlement in excess of £20,000.

The accountant asked for our help and although many of the issues had been discussed and agreed in principle, we were still able to successfully negotiate reductions in liability for all issues, which resulted in the final settlement being less than £10,000.

UK-wide clients - Specialist Involvement

Numerous accountants and their clients across the UK have been on the receiving end of an Inspectors unreasonable or aggressive  approach to an Enquiry.

In many cases, the simple fact that we, as Tax EnquIry specialists, have become involved has been sufficient to make the Inspector take a more realistic view of a case.