Accountant makes major VAT return error...

[kevinjohnsonmbe]

It was a fairly taxing day (unlike the situation I was challenging which was an unfair taxing!)

 

A brief summary (book deal under investigation exposing 6 years of battle with HMRC with a warts and all expose!)

 

07:11 train from Kernow to Londinium - error with train tickets, seat reservation messed up, ticket showed "standard" even though I'd booked 1st class. Just cuffed it, took advantage of buffet and ticket inspector didn't bat an eyelid.

 

11:30ish arrived Paddington - Had a walk along Edgeware Rd to Marble Arch (what with the temperature and the 'natives' could have been Lebanon rather than London - pic 1 - Granted, Edgeware Road has for a long time been known for it's Middle Eastern influence, but seriously, that was not England)

 

Underground from Marble Arch to St Paul's (the temperature was intense!)

 

Quick lunch and a visit to St Faith's Chapel in the Crypt of St Paul's - pic 2.

 

A walk along Ludgate Hill and Fleet Street to the Temple Church - pic 3.

 

13:30ish into the Royal Courts of Justice to check listings and recce court No.24

 

Quick pint in the Old Bank of England and back to the RCJ for 14:50

 

14:50 - court locked and lights out.

14:00 - court locked and lights out.

14:10 - court locked and lights out.

14:15 - checked with reception desk - a few frantic phone calls

14:30 - checked again with reception desk - a few more phone calls and a reassurance that the clerk is on their way.

14:35 - clerk arrived and prep'ed the court.

 

All done in 30 mins - application to appeal to the Upper Tribunal refused.

 

Walked across Waterloo Bridge, quick pint in the Wellington then underground from Waterloo to Paddington.

 

16:00ish arrive Paddington, train for Bristol waiting on the platform so jumped on planning to switch for Plymouth at Bristol.

 

All trains out of London heavily delayed / cancelled due to heat on the line! Not leaves, not snow, not dead bodies..... heat!

 

Back across the Tamar by about 21:30.

 

I can't go into too much detail at present but I have achieved, by Tribunal judgement, a 100% contradiction of the finding of the HMRC desk officer and the HMRC internal review on 1 count and a 66% contradiction on another.

 

I was seeking leave to appeal to the Upper Tribunal in order to challenge the remaining 33% but it has been refused.

 

I was pretty wild yesterday but have calmed myself down and consoled myself with the achievement thus far.

 

And this is the part that might be interesting / relevant to Arbtalkers.

 

It relates to arb arisings from tree works when converted to firewood. Sharkey v Wernher explores the possible outcomes of the question - can you trade with yourself and the Gold Coast Selection Trust Ltd v Humphrey explores and defines the nature of non monetary receipts (barter, benefits in kind etc.)

 

So, apparently, although I cannot reconcile it, 3 separate tax judges have reviewed and agreed that, arb arisings with a 'green' value straight off the tree might have a value range of between -£60 to + £20 per ton (-£60 being the cost per ton to dispose at a licensed tip and +£20 being what you might hopefully expect to sell it for (my figures)), and that split, seasoned, delivered firewood might have a sale price range between £100-£130 per ton (again, my figures), if however, you keep the arb arisings from a business endeavour and use them for personal consumption, legally, you should bring them into your business account (and pay tax on the notional income) at the processed price not the arb arisings price.

 

Sorry, might be a bit garbled but I'm still trying to get to grips with all.

 

PS. Keep the faith Gary! I'm still alive and fighting!

Edited July 20, 2016 by kevinjohnsonmbe
addition

[Gary Prentice]

Thank god for that, I thought you were being water boarded in Cuba.

[felixthelogchopper]

Marble Arch/Edgeware Rd was known as Little Beirut when I worked there in the 90s. Nice and easy to get Khoubz or Baklava after work though.

[AA Teccie (Paul)]

Needless to say in future everything's being disposed of at the tip yeah, AND going down as a business expense.

 

How the heck did all that come about Kevin, a "can of worms" inadvertently opened or an eagle-eyed tax inspector?

 

I'm staggered TBH n I can't wait to attend my meeting in London tomorrow either

 

Hope you're recovering today...FLIP

 

Tc,

Paul

[Kev Stephenson]

if however, you keep the arb arisings from a business endeavour and use them for personal consumption, legally, you should bring them into your business account (and pay tax on the notional income) at the processed price not the arb arisings price.

 

For me this depends on:-

who splits it (you on a sunday in your garden or your groundie at the yard on an early finish),

when (in works time?)

and using what (company owned splitter?)

 

Also if you can prove you would just give the passing man a boot full of logs free of charge off site for his own use at home then it makes no financial difference that you take them personally. If you would have charged him £20 then you should charge yourself the same. These should also be split outside of company time, using an axe or splitter you personally bought and stored at home (not the yard) to be squeaky clean.

 

Damned picky I know but does a garage owning mechanic use the garage ramp and tools to service his own car, does a sparky use his works issue screw driver or meter to do work at home. Are the above taxable benefits like use of a company van after all it's saved you money?

 

What about discounts? Does the same mechanic pay the garage full retail price for the service items or just pay the discounted cost price? He should in theory pay full retail unless his contract state otherwise but then this could be seen as a taxable benefit.

 

My wife gets a lot of air miles and hotel loyalty points through work. The value of these (once exercised) must be declared on a tax return if they are not used for business purposes. Most of the people at her company use them for upgrades for business flights/hotels to save the company money. Should those that decide to take a weekend away on loyalty points pay tax on the retail cost of this break?

 

Kev

[kevinjohnsonmbe]

Thank god for that, I thought you were being water boarded in Cuba.

 

The activities I last engaged in in Cuba were very much more hedonistic Gary! Thanks for reminding me of those happy days!!

 

Marble Arch/Edgeware Rd was known as Little Beirut when I worked there in the 90s. Nice and easy to get Khoubz or Baklava after work though.

 

I spent quite a bit of time in the capital late 90's Felix and remember what Edgeware road was like then. Maybe it's because I've been secreted away in darkest Kernow for a good while that it struck as such a dramatic change on Monday, but seriously, I don't remember actually feeling like I was in Lebanon rather than London back then. I did on Monday.

 

Needless to say in future everything's being disposed of at the tip yeah, AND going down as a business expense.

 

How the heck did all that come about Kevin, a "can of worms" inadvertently opened or an eagle-eyed tax inspector?

 

I'm staggered TBH n I can't wait to attend my meeting in London tomorrow either

 

Hope you're recovering today...FLIP

 

Tc,

Paul

 

It's a long, long story Paul - a battle with HMRC that has been running for close to 4 years. Too much sordid detail to explain properly here - I am seriously engaged with the accountant on the possibility of a book (that may be a bit ambitious) or at the very least an article for publication.

 

My experiences as a layman taking on HMRC and taking it all the way to the RCJ - administration, emotions, time, successes and disappointments, financial costs etc - a full, first hand, unedited journal, with technical, legal and tax specialist input at the end of each chapter detailing what was good/bad, what was legal/illegal (as defined in tax law), what might have been done differently and how outcomes may have changed if done differently.

 

If I can make it work (and capture the full roller coaster of emotions I've experienced) it could be funny, emotional, enlightening, frustrating, exhausting etc... I would be happy if it achieved a FU to HMRC and exposed the true nature of organisational ineptitude and bully-boy tactics, maybe helped someone avoid or more easily navigate the tortuous journey I've had (having) and provided an interesting and informative read.

 

 

(1) For me this depends on:-

who splits it (you on a sunday in your garden or your groundie at the yard on an early finish), when (in works time?) and using what (company owned splitter?)

 

(2) Also if you can prove you would just give the passing man a boot full of logs free of charge off site for his own use at home then it makes no financial difference that you take them personally. If you would have charged him £20 then you should charge yourself the same. These should also be split outside of company time, using an axe or splitter you personally bought and stored at home (not the yard) to be squeaky clean.

 

(3) Damned picky I know but does a garage owning mechanic use the garage ramp and tools to service his own car, does a sparky use his works issue screw driver or meter to do work at home. Are the above taxable benefits like use of a company van after all it's saved you money?

 

(4) What about discounts? Does the same mechanic pay the garage full retail price for the service items or just pay the discounted cost price? He should in theory pay full retail unless his contract state otherwise but then this could be seen as a taxable benefit.

 

My wife gets a lot of air miles and hotel loyalty points through work. The value of these (once exercised) must be declared on a tax return if they are not used for business purposes. Most of the people at her company use them for upgrades for business flights/hotels to save the company money. Should those that decide to take a weekend away on loyalty points pay tax on the retail cost of this break?

 

Kev

 

(1) Spot on Kev! Were you in the gallery??

(2) I'd agree, HMRC/HMCTS might take a different view.

(3) They should invoice themselves at the full normal changing schedule.

(4) Full retail as in (3)

(5) Didn't get into air miles in this scenario, but have done previously. Taxable benefit in kind if accrued in the course of the business activity.

 

I'm not saying I agree or endorse the observations above, just that that is how I have come to understand the interpretation HMRC would have of it (caveated - I'm no expert, just a dumb f that's recently been through the mill!)

 

I received the final decision notice by email yesterday. Right to appeal to the Upper Chamber refused, no right to appeal the refusal decision.

 

I spent last night drafting a letter to the judge thanking him for his judgement and informing him that, although acknowledged, it will never be accepted.

 

I have to get it reviewed by the barrister to ensure I've not strayed into potential contempt.

 

I may have to re-think the paragraph which talks about the consequences of society loosing confidence in the institutions of law & order and that we only have to watch TV news to see how that ends.....

 

Although it's not in my natural character, I may have to just let it go, pay the money and take some satisfaction in the knowledge that it has cost 'the system' more in administrative effort than they will ever recover by enforcing the judgement.

 

The problem with that, apart from my inability to let go on (what I perceive to be) a just cause, is that the money it is costing the 'system' is taxpayers' money, my money, your money, which is paying the salaries of the inept and unaccountable.

 

Kind of makes for a self destructive cycle of anger, resentment, frustration and despair....

[felixthelogchopper]

I spent quite a bit of time in the capital late 90's Felix and remember what Edgeware road was like then. Maybe it's because I've been secreted away in darkest Kernow for a good while that it struck as such a dramatic change on Monday, but seriously, I don't remember actually feeling like I was in Lebanon rather than London back then. I did on Monday.

 

The business I was in at the time was in Bryanston Street and had a clientele that was roughly 85% Arab based, higher in the summer when we had the seasonal influx from Kuwait etc. If I did a day shift, when I left to collect my car or head for the Tube all you could smell was shishas and the local grill restaurants.I have never seen empty streets in London like I did on 9/11(please excuse my using American dating system). Having not been back there in many years, I suspect my take would still be the same as yours.

[Marko]

(3) They should invoice themselves at the full normal changing schedule.

(4) Full retail as in (3)

 

Interesting. When BAe owned Rover, BAe company cars supplied by Rover were taxed as the benefit was that of the manufacturing cost of the vehicle rather than the retail price.

[richy_B]

This sounds like a crazy situation. I often wonder why HMRC can't apply a little common sense and 'pick their battles' more. Ultimately what are they going to achieve with this? What were they were ever hoping to achieve? How much will they have spent in officers time etc to achieve it. A fools errand.

Edited July 21, 2016 by richy_B

[darren@dynamoaccounts]

This sounds like a crazy situation. I often wonder why HMRC can't apply a little common sense and 'pick their battles' more. Ultimately what are they going to achieve with this? What were they were ever hoping to achieve? How much will they have spent in officers time etc to achieve it. A fools errand.

 

Having dealt with HMRC for over 25 years, there's no logic or commercial sense in a great many of their decisions. During the initial years of training, a partner once said to me that if an inspector was any good, he'd be poached to work in practice for twice the money, leaving the dross in the tax office. And to be fair, he was right.

 

If you look at the record of HMRC's case wins, it makes poor reading. Their record against contractors is prime example, spending tens of millions of pounds chasing a couple of hundred grand which is all politically motivated.

 

Same with Kevin's case, no common sense or commercial awareness. And at the end of the day, the judgements like that tend to be easily got around and with no substance.