HMRC Enquiry - Make me an offer?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
I have a client who has just been through a long tax enquiry because his previous accountant put in provisional figures for 5 years and then ran off with all his paperwork.
He has finally been given a tax bill of £10,000, but has been told by the HMRC Inspector to "make them an offer".
How much should he offer? I have never come across this before.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    Hi TC

    I assume there is no chance of making a claim on previous accountants PI?

    What do you/your client feel would be reasonable? How much can you client afford to pay? Would he need "easy payment terms"?

    Can you come up with a figure that you can justify?

    Sorry - I know that I am asking more questions rather than answer yours, but if you can answer some or all of these, then you might come up with the magic answer :D

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    Firstly the accountant has "ran off" with no trace, so no chance of claiming against him.

    He has been told by HMRC that he must pay within 45 days unless he can prove than he cannot pay (he could get the money through his open plan mortgage).

    We have already done alot of paperwork to come up with sensible figures, and this tax bill is as accurate as we can get with only bank statements and a few other pieces of information.

    So how much should he offer? I need help with this one. Have you been asked this before?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    No - never heard of it. Problem is hard to judge what would be acceptable - too little and they think you are taking the piss, and too much - well client could have saved his money - a tough one!

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    This sounds like they are asking your client for an offer to pay the £10k over a specified time period - if this is the case they usually only allow a maximum of 3 months. HMRC are using this tactic nowadays - instead of them deciding how long the liability can be paid off they want the taxpayer to make an offer.

    You need to clarify what the "offer" relates to. I would imagine it is an offer of a payment plan rather than offering assumptions as to what the tax liability should be.

    Kind regards
    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    It is definitely not an offer of a payment plan. They want payment by 15th December, whatever. They have just asked him to "make an offer" on the amount owed!
    Help someone!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    Again, not something I have experienced myself.

    I would contact the Inspector who wrote the letter and have a chat with him. I usually find this helps in any enquiry. Just be honest with him and if he genuinely does want you to make an offer for the tax liability then ask him what he thinks would be reasonable. Inspectors are constantly being ignored so they tend to be more lenient to those who maintain good contact.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:HMRC Enquiry - Make me an offer?

    This is very out of the ordinary. However, self-assessment is just what its name suggests.

    Without knowing the details of your client and their income/expenses, the Inspector should at least give you some indication as to what they would deem reasonable. The £10k would appear to be an "on account" payment of the actual liability - this happened to a client of ours.

    On the assumption your client has a constant turnover of business, then it would seem reasonable to take the latest set of accounts and scale them back. Even so, if the client does not have a constant income stream from the business, then it would seem reasonable to base any assessments on the current year as there is no way of knowing the previous year if his adviser is no longer contactable.

    Kind regards
    Steve

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