Follow HMRC Advice At Your Own Risk Says Jonathan Gifford Partner at Haines Watts North Devon LLP

A recent tax case involved a lady that sold some shares and tried to claim a capital gains tax rollover relief on the arising gain. The lady had, via her accountant, obtained confirmation from HMRC that the relief could be claimed. However, once her tax return was submitted, HMRC amended the return and removed the relief claimed.

Jonathan Gifford -Partner Haines Watts North Devon LLP

This case gives great cause for concern; surely a taxpayer can be entitled to rely on advice received from the tax authorities!? The importance of taxpayers selecting an experienced and qualified tax professional is highlighted clearly in this case – penalties and interest charged by HMRC for errors can be substantial, and HMRC do not always give the correct advice when contacted. Contact us today for a free Golden Hour with one of our partners.


Jonathan Gifford
Haines Watts North Devon LLP

Farmer's Tax Win

HM Revenue and Customs has a longstanding policy of not reopening settled cases, even when subsequent decisions change the case law. So it was a significant victory for Doug Robshaw, tax manager at Haines Watts in Hereford, and his client when they persuaded HMRC to review a claim for Agricultural Property Relief (APR) on a farmhouse and secure a rebate.

The decision to appeal was promoted by the 2013 Tax Tribunal case (HMRC v Hanson) which successfully challenged HMRC’s view that APR could not be granted on farm houses where the surrounding land was not in common ownership.

The farmhouse was occupied by the deceased’s son, who farmed the land, but the ownership of the land had been split between family members.  The tribunal found the occupation of the land was also relevant in assessing eligibility and APR was therefore granted on the farmhouse.  The situation where farmland is not in common ownership with the farmhouse is not usual, but HMRC’s willingness to review settled cases is.

Although the client’s circumstances were similar to Hanson – he owned and farmed the land but prior to her death his mother owned and occupied the farmhouse – there was no guarantee that HMRC would reopen the case which dated back to 2009.

However Doug, having previously worked for HMRC for 12 years, had a good understanding of how the system works and the best approach. “Having submitted the necessary paperwork, I engaged with the tax inspector who originally handled the case and there was a continued dialogue throughout the whole process. This was I was able to move the case along and provide supporting evidence.”

“I think I was also assisted by a general tide of good will towards a farming community facing adversities after the recent floods.”

Both Doug and his client were delighted when HMRC agreed to refund the Inheritance Tax paid on the farmhouse, which amounted to £120,000 along with £9,500 of accrued interest.

Doug feels the decision opens the doors for others to claim APR retrospectively.  But he added: “Each case needs to be assessed on its own merit. Potential claimants need to ensure they get expert advice on whether to proceed or risk incurring professional fees.” 

For  farm tax or agricultural advice contact Haines Watts North Devon and Haines Watts Rural Business LLP 

www.hwca.com/accountants-north-devon

01237 471736

northdevon@hwca.com

CHARTERED ACCOUNTANTS ADVISE OFFSHORE HSBC ACCOUNT HOLDERS TO ‘ACT NOW OR FACE A HEAVY PENALTY’ FOLLOWING INFORMATION LEAK

Devon-based Chartered Accountants Haines Watts urges local taxpayers with undisclosed HSBC bank accounts in Jersey to seek advice as a matter of priority. The warning comes just days after a list, containing the names, addresses and account balances of 4,388 UK residents with offshore accounts, was given to HMRC by a secret source. Collectively, they have £699 million in current accounts at the bank.

Haines Watts Exeter office advises that they have already been contacted by individuals and companies that suspect they are on the list.

Patrick Tigwell Partner says: “This investigation is going to have an impact on a lot of people and some of those will be based in the South West. Since the news broke, we have been contacted by a handful of individuals who suspect they are on the list and who are unsure of what they should do next.  Those HSBC account holders who have not complied with their UK tax obligations need to act quickly and get the professional help that they need. If they do so, they could avoid a heavy penalty in the form of a fine.”

The leaked list of HSBC clients is reported to include names from the oil and mining industries as well as doctors and some celebrities – all groups that typically have significant overseas earnings.

Patrick adds: “If you have an offshore bank account whether in Jersey or elsewhere and you suspect there may be a problem, my advice would be to be proactive and take the relevant steps to make a disclosure before you are approached by HMRC.”

For more advice, contact Haines Watts direct on 01392 260 310, email jcrice@hwca.com or visit www.hwca.com/accountants-exeter

  

Patrick Tigwell, Partner Haines Watts Exeter