Anyone else havin MAJOR problems with the Inland Rev?

[A2J]

Just wondering?

Personally I can't believe how bent they are.

I'm a regular poster btw but for obvious reasons I'm incognito.

Any more details. Am intrigued....

you don't work for them though do you? Just a bit paranoid at the moment.

Kind of but not at the moment.

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Ok, my dh is being prosecuted for non payment of Income tax relating to his previous employment. Where the IR are holding him responsible because the employers arranged for payment to be made direct. It's been a nightmare because they never notified him of the amount of tax due or demanded it from him they just prosecuted him. They never went through the test as to when someone is employed or self employed.

Off to bed now xx

Prosecution sounds unlikely if there hasn't been any formal assessment? Is it a criminal prosecution?

When you say that the employers arranged for payment to be made direct - do you mean that dh was paid gross ie without deducting tax? Or that the empoyers were deducting the tax but not paying over to the IR?

Yes it is a prosecution and there wasn't any formal demand and to this day they haven't told us how much it is. It was gross.

Pmsl, gave my real name away now

huh! Each year my DH usually gets a rebate... this yr he's been landed a bill of £895!! They f**ked up.. Have to ring them in the morning and see whats going on!

Well it sounds as if they are looking at deliberate fraud, so i agree that it will be an unpleasant experience. Has you dh got an adviser?

Yes he's had advice from an accountant who's said he's never heard of anything like this and that they (IR) don't prosecute where status is an issue.

Well without an assessment they are not trying to argue the finer points of tax law - they are prosecuting for fraud. You have to go through the General or Special COmmisioners to argue a legal interpretation of tax law.

A prosecution such as the one you describe could crop up in case where an "employer" pays gross and the "employee" then doesn't complete a tax return, or makes a return but doesn't declare the income.

The employer appears to have told the IR that no tax has been paid, probably in spite as dh had reported that they had witheld his P45 and the IR have said that because payment was made direct to dh that it's his liability. Even though he was still working for his employer under their insurance and they had arranged the direct payment.

Presumably no payslips? Did they actually deduct any tax from the payments?

How long ago was this?

91 to 2000. They did deduct something beyond his salary but no one is sure what it is? It gave the impression that they were paying additional tax for him. Dh knows they were involved with a back money scam so nothing ever added up. Another ex partner told him this.

No P60s? What did dh do about a tax return?

Sorry, it does sound messy.

The P60s showed an income above his salary and so it appeared they were accounting for some of the tax? The IR say that the income received was much greater than that and he must've realised that not all tax had been paid but it was difficult because P60s were given very late in the tax year, sometimes 6 months after. Wage slips were often missed and the most he ever got was 8 in any one year.

Oh dear, as I said it does all sound as if it is a bit of a mess.

Are you confident in your accountant? I only comment as given the amount of time I would not have been surprised at IR pursuing a prosecution, even only as a hard-nosed "negotiating" tactic to ensure that your dh co-operates fully.

Has your accoutant been involved in preparing returns for 91-2000?

Dh was in salaried employement so didn't have an accountant. It's only since 2001 that he became self employed he's needed one.

...and by deduction dh wouldn't have filled in a tax return because he didn't think he needed to...

Has your accountant made any calculations of what the returns would look like for that period (ie how much tax is at stake?)

It is a bit unfair that ignorance of the law is no excuse, but I would have expected that some meeting between your accountant and the IR would persuade them that the prosecution is unnecessary and that a settlement can be reached (and during that discussion you can explore the employment status). It's an unpleasant but not totally unusual tactic for them to employ if they feel that Dh is not being sufficiently forthcoming.

As an aside Dh will need to check the position on his NI as well. If he wasn't treated as an employee then contributions may not have been made.

He is doing a calculation to see what tax would have been payable if dh had been self employed but his advice is that throughout the period dh was always an employee and wasn't liable. The employers were deducting some tax and national insurance but not all the tax an NI has been paid for the direct payments. He got direct payments for some out of hours work but he was still working under their name and insurance. It went to trial recently and we ended up with a hung jury and we proposed putting monies on deposit and havin meetings to discuss liabliliy and how much tax due but IR refused to do it and said they wanted a retrial. We think the tax (if he was self employed) is 5-10 k over a 10 year period.

thanks for the advice Ladymuck.

I'm sorry that you're going through this. Sounds daft that they're spending more money prosecuting you than they'll get if you settled (I take it the direct payments were customers paying to dh and not the employer then?). It must be immensely stressful and frustrating for you both to be going through this.

Thanks for your concern, it's been horrendous tbh. It was an intermediary paying on behalf of the employer not a customer. The waters are muddy because the employer always claimed he had senior contacts in the IR and there does appear to be a series of blind eyes turned on his behalf. We've been told that the IR always try and class people as employees rather than self employed as they get more tax back and usually chase the employer rather than the employee.