Tedious HMRC
Aug 21st 2018, 12:40 am
#1
Forum Regular
Thread Starter
Joined: May 2013
Posts: 278
Tedious HMRC
This is a cautionary tale - I thought it couldn't possibly happen that HMRC might investigate me as I play by the rules and my tax position is quite straightforward - but they did! And although I managed a complete victory (i.e. I had to pay no extra tax at all) it was a major hassle.
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
Last edited by FriendlyExpat; Aug 21st 2018 at 12:44 am.
Aug 21st 2018, 5:26 am
#2
Lost in BE Cyberspace
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 15,887
Re: Tedious HMRC
This is a cautionary tale - I thought it couldn't possibly happen that HMRC might investigate me as I play by the rules and my tax position is quite straightforward - but they did! And although I managed a complete victory (i.e. I had to pay no extra tax at all) it was a major hassle.
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
As I also skirt quite close to the limits - where you in the UK close to 90 days or just over 45?
Thanks, Millhouse
Aug 21st 2018, 6:25 am
#3
Lost in BE Cyberspace
Joined: Nov 2012
Location: bute
Posts: 9,740
Re: Tedious HMRC
They are tax collectors.
Aug 21st 2018, 7:43 am
#5
Lost in BE Cyberspace
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 15,887
Aug 21st 2018, 2:10 pm
#6
BE Enthusiast
Joined: Jan 2017
Location: Dubai
Posts: 851
Re: Tedious HMRC
This is a cautionary tale - I thought it couldn't possibly happen that HMRC might investigate me as I play by the rules and my tax position is quite straightforward - but they did! And although I managed a complete victory (i.e. I had to pay no extra tax at all) it was a major hassle.
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
The background is that I filed one of my previous tax returns by myself to "save time" (!) and made a couple of silly but trivial errors. This caused HMRC to (reasonably) ask for clarification, which I gave (with no change to the amount of tax owed which was nil).
Annoyingly HMRC obviously thought they were onto something because I was pretty close to some of the residency thresholds etc, so they went on a massive fishing exercise asking me to produce all my travel records including travel times, account (with evidence) for every hour that I worked for the entire year both overseas and in the UK, including trying the "airport travel time" trick etc plus a number of other things. Luckily I did have (or could obtain) all the requested information and after numerous follow up questions and spending I suspect way more than 50 hours over 8 months, they have finally issued a notice of conclusion accepting that I still owe no tax.
My conclusions from the process:
- don't think it won't happen to you - it might! And take HMRC very, very .... VERY seriously. They do not mess around.
- do use a good tax advisor and make sure you file your tax returns on time and accurately
- understand the rules and make very sure you don't accidentally break any of the various limits (e.g. days in UK / days working in UK / record travel time properly / pay tax on UK source income where relevant)
- If at all possible, do not go close to any limits as it's incredibly easy to make a small mistake that tips you over the edge and HMRC can come up with some ingenious ways of challenging your records.
- keep accurate records that are easily accessible and defensible
- think about what HMRC could ask you to produce or obtain from third parties othat might undermine your own records (e.g. work diaries, holiday records, mobile phone records, etc etc) and do not try to cut any corners!
- HMRC can ask very sharp and tricky questions so be very careful when replying.
- if you do get investigated, expect tons of annoying follow up questions even if the initial questions are trivial.
- There is light at the end of the tunnel (eventually)!
I'm sure this is mostly captain obvious stuff, but I just wanted to share my experience in case it helps others in the same position. Anyone else out there enjoyed a similar experience?
Aug 21st 2018, 3:00 pm
#7
MODERATOR
Joined: Dec 2004
Location: Dubai
Posts: 6,370
Re: Tedious HMRC
Always good advice to never cut corners and get professional help if you need it.
Keeping a track record of evidence such as old visas/passports, phone bills, tenancy contracts etc really helps you when they do ask.
Sometimes they pick a file at random and do extra scrutiny so always assume it can happen to you!
N.
Keeping a track record of evidence such as old visas/passports, phone bills, tenancy contracts etc really helps you when they do ask.
Sometimes they pick a file at random and do extra scrutiny so always assume it can happen to you!
N.
Aug 21st 2018, 4:52 pm
#8
peterparker
Joined: Sep 2007
Posts: 196
Re: Tedious HMRC
What are the penalties now for mistakes? Is it 100% of the owed amount of tax - or is it so much for every year after mistake? Even that is complicated.
Aug 22nd 2018, 11:03 am
#9
Forum Regular
Thread Starter
Joined: May 2013
Posts: 278
Re: Tedious HMRC
I was being very cautious (paranoid?) and didn’t want to post anything about myself that HMRC could possibly find while the enquiry was active, even if the odds were very remote.
Aug 22nd 2018, 11:08 am
#10
Forum Regular
Thread Starter
Joined: May 2013
Posts: 278
Re: Tedious HMRC
The law is changing this summer so the penalties for expats can be even more than 100% in some cases. It can be a bit scary!
