.png)
.png)
Hand-delivered returns
HMRC will no longer be issuing receipts for self-assessment returns delivered by hand to local offices, see 'Self assessment', Update, Taxation, 24 November 2005, page 198. HMRC have published the following note on their website:
'We have reviewed all the responses and a number of them recognise our reasoning for looking to stop the issue of these receipts. But the main concern expressed in most if not all of the responses centres around the need for proof that a return was received in order to defend an incorrect penalty notice. We can understand that concern. And whilst we are putting a lot of effort into ensuring that all returns received are logged correctly and timeously, we accept that given the sheer scale of the operation means it is always possible that some mistakes may be made. But our experience shows that in relation to the total number of returns received those which are not logged correctly represent an extremely small percentage. However, we understand also that an incorrect penalty notice can have a negative effect on the agent -client relationship.
'In view of this, we have issued guidance to our staff that in the event of an agent challenging a penalty notice on the basis that the return had in fact been lodged, we should accept any reasonable evidence the agent has that the return was filed on time. It is not possible to be prescriptive as to what evidence we will accept as this may vary between agents. But the key message is that we are looking to take a reasonable view. We hope that this allays any concerns likely to be caused by our offices not giving receipts.'
The Tax Faculty says that 'receipts' in this context means any sort of receipt, such as stamping a copy of page 1 of the return, stamping a copy of a letter, or checking and stamping a pre-prepared list of tax returns, as well as their standard receipt. It also notes that the decision will have almost immediate effect and therefore include the January rush.
As to the evidence advisers will need to be able to prove that they have delivered a return in time, they should at least keep details of the time and date the return was delivered, together with the name of the local office and the officer to whom it was handed.
www.hmrc.gov.uk
Missing traders
The big four accountancy firms, Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP have unveiled four steps that they will take against missing trader intra community fraud.
David Varney, chairman of HMRC welcoming the support from these firms said that the announcement results from 'growing co-operation between HMRC and the big four'. HMRC will now be looking to other advisers and taxpayer representatives 'to support and work with HMRC in tackling this serious criminal activity'.
The announcement follows:
'Missing trader intra community fraud (often referred to as carousel fraud though there are many variations) is said to be costing the Exchequer hundreds of millions of pounds of lost VAT receipts and is typically prevalent in the supply chain for small high volume goods.
'As leading professional services firms, we condemn all such evasion and fraud and we have responsibilities under existing legislation which require us to report suspected criminal activity.
'We take and will continue to take all reasonable measures to work only with legitimate business and traders in such supply chains, through our individual firm client acceptance and continuance procedures.
'The extent of MTIC fraud, however, suggests that heightened awareness among legitimate traders in these supply chains is necessary. In order to help with this, we will use our best endeavours to:
(i) advise such of our clients to whom this would be relevant of the commercial risks that they run if they trade with a MTIC fraudster, e.g. danger of not recovering VAT not accounted for by the fraudster, risk of becoming the inadvertent subject of an HMRC fraud investigation, reputational risk etc.;
(ii) advise such of our clients to whom this would be relevant of the characteristics of the promoters of such frauds through the medium of e-mail alerts, seminars and individual meetings, as appropriate and starting before 31 December 2005;
(iii) encourage those of our clients who could be affected to issue their own messages and alerts internally to heighten awareness of this problem; and
(iv) as a part of our normal new client and work acceptance procedures, we will remind our people, starting again before 31 December 2005, to notify the appropriate risk management partners if they suspect MTIC activity on any client's affairs. This process will operate alongside our existing legal obligations under the Proceeds of Crime Act and the making of any suspicion reports through our money laundering reporting officer.
www.hmrc.gov.uk
