Major companies attempting to avoid tax liabilities have dominated the headlines lately, but when a lowly tax payer won a court case against HMRC, it didn´t get a mention in mainstream press. The appellant in said court case was defending a demand to pay a fine imposed by HMRC because he had made a mistake on his Self Assessment Tax Return form.
You may not think it is impossible that you could incur a fine of at least £100 for making a mistake on your tax form, but HMRC will vehemently disagree and issue a penalty against you anyway. The taxman clearly has no concern whether you made an honest mistake or attempted to fraudulently avoid your tax liabilities – they will fine you anyway!
Since the Treasury increased the tax agencies legal powers and handed them almost £1bn to tackle tax avoidance, HMRC has taken a very hard line in an attempt to recover as much revenue for the government´s coffers as possible – and that includes penalties from tax payers who have innocently filed an incorrect self assessment tax reform.
Tax agency criticised
As a result of their bullishness, HMRC has taken some flak from critics, with Low Income Tax Reform Group (LITRG) leading the chorus. LITRG has accused the government and the tax agency of confusing error with fraud and are attacking innocent victims with scaremongering tactics.
A judge in the recent tribunal of Salmon v Revenue & Customs  UKFTT 306 (TC) was inclined to agree the Tax Reform Group and found in favour of the appellant Mr Salmon who was being pursued by HMRC for a surcharge on an estimated tax bill. Giving his summoning up of ther incident the judge said:
“There has been much in the news recently about aggressive tax avoidance; measures taken by individuals purely to legally reduce their taxes to the absolute minimum. I would suggest that this is a clear example of aggressive tax collection, and should equally be discouraged.”
Of course, nobody wants to pay more tax than they are legally required to and most business owners diligently complete their self assessments forms honestly. Whilst the general tax payer fully supports HMRC in the combat against tax fraud, they do not want to be subjected to the threat of fines and accused of deliberately seeking to hide their income and to criminally avoid paying tax. In LITRG’s experience numerous tax payers who innocently made an error on their tax return have become entangled in HMRC’s aggressive anti-fraud strategies.
Competing HMRC´s online self assessment tax return form can be complicated as many of the questions included on the form are entirely ambiguous and specifically designed to catch tax evaders. To ensure that you do not become a victim of the tax man´s hard line tactics, contact a qualified accountant at Taxaccolega, a low fixed fee accountant in London, who will be happy to help you fill in your self assessment tax return and avoid having to pay a fine – or solicitors fees at a tribunal.