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proggy
26th April 2013, 10:02
Some one man band contractor guy broke down crying on 5 live because HMRC bent him over.

Old Hack
26th April 2013, 10:03
Some one man band contractor guy broke down crying on 5 live because HMRC bent him over.

Not SB, he'd enjoy that...

Troll
26th April 2013, 10:03
Some one man band contractor guy broke down crying on 5 live because HMRC bent him over.Did he deserve it?

proggy
26th April 2013, 10:13
Did he deserve it?

They did a spot check and found he had small things like petrol receipts wrong, then he hadn't invoiced one of he clients, he got a bill for a few hundred grand. He spent 2 years savings and 50k fighting it and he won. At that point he started bedwetting.

MyUserName
26th April 2013, 10:16
They did a spot check and found he had small things like petrol receipts wrong, then he hadn't invoiced one of he clients, he got a bill for a few hundred grand. He spent 2 years savings and 50k fighting it and he won. At that point he started bedwetting.

You mean he had not invoiced a client and just took cash in hand?

proggy
26th April 2013, 10:18
This is it

BBC News - Man describes how he was chased for money he did not owe (http://www.bbc.co.uk/news/uk-16272214)

Paddy
26th April 2013, 11:10
Thirty odd years ago when I was self employed the business failed. I did not claim any benefits. Six months later I started up again and I received a tax bill for the time not working. The Inland Revenue said it was payable because if I was not working, I should have claimed benefits. I had to pay up.

Stupidly, brother in-law was losing money on his shop for ten years in the hope that he could eventually make a profit and sell it. Despite loses of over £200,000 and audited accounts, the Inland Revenue estimated his “profits” and took him to Court. He will be paying the Inland Revenue for the rest of his life for money he never owed. He refuses to go bankrupt (silly bugger)

Old Hack
26th April 2013, 11:13
Thirty odd years ago when I was self employed the business failed. I did not claim any benefits. Six months later I started up again and I received a tax bill for the time not working. The Inland Revenue said it was payable because if I was not working, I should have claimed benefits. I had to pay up.

Stupidly, brother in-law was losing money on his shop for ten years in the hope that he could eventually make a profit and sell it. Despite loses of over £200,000 and audited accounts, the Inland Revenue estimated his “profits” and took him to Court. He will be paying the Inland Revenue for the rest of his life for money he never owed. He refuses to go bankrupt (silly bugger)

I was self employed many years ago, then left the country. I came back 6 years later to find a tax bill for the year after I left. I write to hector, saying, sorry about your mistake, but, etc, etc and they wrote back saying I had to pay it or go to court. Eh? Ended up paying it, only to then have to go to court to ask them to return it, which they did, eventually.

I hate them, loathe them.

MyUserName
26th April 2013, 11:18
They did a spot check and found he had small things like petrol receipts wrong, then he hadn't invoiced one of he clients, he got a bill for a few hundred grand. He spent 2 years savings and 50k fighting it and he won. At that point he started bedwetting.

Sounds like he had his life completely destroyed by this, tragic :(

VectraMan
26th April 2013, 11:26
Not invoicing one of his clients, so did the client pay? Or did he neglect to pay the CT on it? If it was £200K's worth of CT he hadn't paid, then that would have been a £million invoice he forgot to send.

All sounds more than a little dubious. Is this different from the people who signed up to obviously dodgy off-shore loan schemes who now claim their lives are ruined by having to pay the tax they should have paid in the first place?

bobspud
26th April 2013, 11:33
Stupidly, brother in-law was losing money on his shop for ten years in the hope that he could eventually make a profit and sell it. Despite loses of over £200,000 and audited accounts, the Inland Revenue estimated his “profits” and took him to Court. He will be paying the Inland Revenue for the rest of his life for money he never owed. He refuses to go bankrupt (silly bugger)

This needs an accountant to do some proper investigation into this as it looks like someone has wilfully ****ed this up to gain their targets... You cannot owe tax on a loss. Its not physically possible and a while back several HMRC inspectors were caught pulling a stunt on unsold stock at year ends... Something to do with not reversing the book pricing for stock calculations at year end in order to land shop owners with massive tax bills....
Meanwhile I know a chap that really screwed the pants of HMRC and despite owing them tens of thousands in VAT. He is still managing to get money back out of them every quatre because of the fact that his company sells entirely off shore. His take on HMRC is that they are incredibly friendly and very understanding :throw:

TheFaQQer
26th April 2013, 11:39
This is it

BBC News - Man describes how he was chased for money he did not owe (http://www.bbc.co.uk/news/uk-16272214)

Didn't we discuss this 18 months ago when it happened?

proggy
26th April 2013, 12:31
Didn't we discuss this 18 months ago when it happened?

It just happened today, it's 2011 here, are you from the future? Whats it like?

NickFitz
26th April 2013, 12:34
Didn't we discuss this 18 months ago when it happened?

I very much doubt it. The subject may have been raised, and there may have been much hooting, bellowing, and posturing; but discussed? No. Not here ;)

Old Hack
26th April 2013, 12:35
It just happened today, it's 2011 here, are you from the future? Whats it like?

Buy Apple shares, then flog them a couple of weeks back. Bit coins, likewise. Short facebook.

It's shit

IR35 Avoider
26th April 2013, 12:37
This needs an accountant to do some proper investigation into this as it looks like someone has wilfully ****ed this up to gain their targets... You cannot owe tax on a loss.

I'm guessing that HMRC said we don't believe your accounts, for your kind of business this is the kind of profit we would expect you to make, now pay us the tax on the profit we imagine you made. They can issue any bill they like, then it's up to you to prove you don't owe it.

My plumber told me a similar story about a guy he knew. He chose a classification code for his business that while reasonable put him in the company of of a majority of people with a very different kind of business. So when HMRC saw that his profits were not the same, they simply billed him for what they thought his profits should be, and told him he would go to jail if he didn't pay. (He went to plumbers accountant, who kept telling HMRC to feck-off, and every time he did, HMRC would send another bill half the size of the previous one, till eventually they were demanding bugger-all.)

proggy
26th April 2013, 12:57
Buy Apple shares, then flog them a couple of weeks back. Bit coins, likewise. Short facebook.

It's tulip

Cool, I will do this after I get back from Japan, off to do a contract at the Fukushima nuclear plant, big bucks!

vetran
26th April 2013, 12:58
Cool, I will do this after I get back from Japan, off to do a contract at the Fukushima nuclear plant, big bucks!

that explains a lot!

proggy
26th April 2013, 13:03
that explains a lot!

Eh why? have you heard of it?

vetran
26th April 2013, 13:06
Eh why? have you heard of it?

if I were you I wouldn't bother with any pension contributions if you work there.

Old Hack
26th April 2013, 13:14
I'm guessing that HMRC said we don't believe your accounts, for your kind of business this is the kind of profit we would expect you to make, now pay us the tax on the profit we imagine you made. They can issue any bill they like, then it's up to you to prove you don't owe it.

My plumber told me a similar story about a guy he knew. He chose a classification code for his business that while reasonable put him in the company of of a majority of people with a very different kind of business. So when HMRC saw that his profits were not the same, they simply billed him for what they thought his profits should be, and told him he would go to jail if he didn't pay. (He went to plumbers accountant, who kept telling HMRC to feck-off, and every time he did, HMRC would send another bill half the size of the previous one, till eventually they were demanding bugger-all.)

I have also been told of 'flags' Hector has on your business. If you make a certain profit, and swing in between variables over the years, then they rarely notice you, but if one year, you make too much profit, or less than before (lower than the flags), then that too raises an investigation. It's one reason my accountant advises his contractors to change companies every 3-4 years, as it means you're less likely to pop a flag.

proggy
26th April 2013, 13:18
I have also been told of 'flags' Hector has on your business. If you make a certain profit, and swing in between variables over the years, then they rarely notice you, but if one year, you make too much profit, or less than before (lower than the flags), then that too raises an investigation. It's one reason my accountant advises his contractors to change companies every 3-4 years, as it means you're less likely to pop a flag.

But surely changing companies every few years is a flag in itself? The best thing to do is use a good accountant and follow their advice.

MyUserName
26th April 2013, 13:28
But surely changing companies every few years is a flag in itself? The best thing to do is use a good accountant and follow their advice.

How do you know if they are a good accountant? Perhaps changing companies every few years is good advice!?

Old Hack
26th April 2013, 13:33
How do you know if they are a good accountant? Perhaps changing companies every few years is good advice!?

I am not too sure they have a flag on how often you change companies, I am on my 6th now. Logically, it makes sense to me. Also, there's a statute on how long they cna look back over your books, and I also guess it limits how many years trading they can investigate in one company. Once it has folded, it has folded.

Old Hack
26th April 2013, 13:33
But surely changing companies every few years is a flag in itself? The best thing to do is use a good accountant and follow their advice.

I have, and I do.

cojak
26th April 2013, 14:08
Thirty odd years ago when I was self employed the business failed. I did not claim any benefits. Six months later I started up again and I received a tax bill for the time not working. The Inland Revenue said it was payable because if I was not working, I should have claimed benefits. I had to pay up.

Stupidly, brother in-law was losing money on his shop for ten years in the hope that he could eventually make a profit and sell it. Despite loses of over £200,000 and audited accounts, the Inland Revenue estimated his “profits” and took him to Court. He will be paying the Inland Revenue for the rest of his life for money he never owed. He refuses to go bankrupt (silly bugger)

Bloody Hell, really?? :eek

I never realised that aspect of the tax system! I wouldn't have claimed either unless I was flat broke!

sasguru
26th April 2013, 14:56
Makes you almost want to go umbrella just to avoid the shit :laugh Almost but not quite.

bobspud
26th April 2013, 19:21
My accountant warned me that closing the company has no use anymore because HMRC have the power to link previous companies and re open them if they find your current company has issues.

He also pointed out that closing the company will also get you unwanted attention so basically you are screwed either way.

Also when I first opened my company it was visited by a Vat inspector before I got a vat number...

For the record she was really nice and very helpful.

AtW
26th April 2013, 20:00
Stupidly, brother in-law was losing money on his shop for ten years in the hope that he could eventually make a profit and sell it. Despite loses of over £200,000

So where did he get £200k to cover those losses? He had to have money to stay solvent.

And if he could afford to sustain such losses, why could not he afford to get a good lawyer?

OwlHoot
26th April 2013, 21:10
It's one reason my accountant advises his contractors to change companies every 3-4 years, as it means you're less likely to pop a flag.

and all the better if you can keep below the VAT threshold and not register for VAT, because a few months after starting a new company one inevitably has a VAT inspection, and now the inspectors demand to see your last two or three contracts, no doubt to see if you're likely to be caught by IR35! :eek

vetran
26th April 2013, 23:06
So where did he get £200k to cover those losses? He had to have money to stay solvent.

And if he could afford to sustain such losses, why could not he afford to get a good lawyer?

probably :

remortgaged the house.

he believed that the truth would set him free, He didn't owe the money and could prove it
however personally having experienced the stupidity inherent in the justice system he was naive.

Wanderer
26th April 2013, 23:08
Not invoicing one of his clients, so did the client pay? Or did he neglect to pay the CT on it? If it was £200K's worth of CT he hadn't paid, then that would have been a £million invoice he forgot to send.

He admits that he omitted to write up a few invoices. So how much were the invoices for then? How was he paid the money that caused his accountant/bookkeeper to miss that income? Must have been quite a lot if he got a massive bill. He also said it cost him £50k to sort it all out, how much of a mess were his accounts in then? There's a lot more to this than meets the tearful eye.

The poor chap does sound like he's had a bit of a breakdown but HMRC can't let someone off the hook just because they start crying when they get caught running their business a bit fast and loose....

AtW
27th April 2013, 16:10
he believed that the truth would set him free, He didn't owe the money and could prove it however personally having experienced the stupidity inherent in the justice system he was naive.

Well, I don't buy such story. Either not all material facts are told or it's total BS.

centurian
27th April 2013, 16:41
Well, I don't buy such story. Either not all material facts are told or it's total BS.

Yeah, something doesn't quite add up. HMRC may not be the sharpest tools in the box, but you don't get a demand for 200K from just having a few missing invoices and petrol receipts.

tractor
27th April 2013, 17:46
My accountant warned me that closing the company has no use anymore because HMRC have the power to link previous companies and re open them if they find your current company has issues.

He also pointed out that closing the company will also get you unwanted attention so basically you are screwed either way.

Also when I first opened my company it was visited by a Vat inspector before I got a vat number...

For the record she was really nice and very helpful.


and all the better if you can keep below the VAT threshold and not register for VAT, because a few months after starting a new company one inevitably has a VAT inspection, and now the inspectors demand to see your last two or three contracts, no doubt to see if you're likely to be caught by IR35! :eek

This is not true for everyone. Maybe there are local variations. I know someone :grin who over 25 years had 8 companies (see the csa thread), only ever 1 compliance visit before taxman was velcroed to the vatman, no vat compliance visits and no nothing else either!