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Hmrc To Fine Small Businesses For Record Keeping Failures

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http://www.telegraph.co.uk/finance/yourbusiness/8220107/HMRC-to-fine-small-businesses-for-record-keeping-failures.html

Over two million small businesses that keep poor trading records face investigation and fines of up to £3,000 under a planned HM Revenue & Customs clamp down in the New Year.

The “Business Records Checks” campaign will target the 40pc of all 4.9m small and medium sized businesses that HMRC said suffered from poor record keeping and where unpaid tax was likely to be due.

HMRC said it will use its existing powers to tackle 50,000 of the worst cases each year from the second half of 2011. Penalties would be imposed “for significant record keeping failures,” it said.

Richard Mannion, national tax director at accountants Smith & Williamson, said many small business found keeping up to date with record keeping “an administrative nightmare”.

“One of the difficulties facing entrepreneurs and SMEs is that they may have to keep records for income tax, VAT, capital gains tax, PAYE and so on. Separate penalties apply for each set of taxes so a small business can fall foul of the rules in several areas,” he said.

So I assume these firms face a fine + paying the taxes which they "owe"?

The taxman cometh for your cash.

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So you are fighting for survival in the eye of a recession and along comes the state to kick you in the nuts because the accountant you hired hasn't done something correctly.

I despair of this country.

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So you are fighting for survival in the eye of a recession and along comes the state to kick you in the nuts because the accountant you hired hasn't done something correctly.

I despair of this country.

There are an incrediblely large number of terrible accountants out there, they are usually unqualified, but while I was temping mid 2010 I saw lots of terrible work from firms who had bought out smaller firms.

Look if they are qualified or not! If they are qualified they have something to lose if they do jobs badly! Getting your ACCA/ACA is a pretty long drawn out task!

Edited by ken_ichikawa

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How much more effort is it to claw back billions from thousands of small businesses, rather than go after the likes of Vodafone?

The question is simple. It is one of resistance, vodaphone has lawyers, and has the power to resist for a very long time. M&S resisted the tax man on VAT for decades, so did Debinhams. The government lost on both counts, so they did exactly as Injin predicted they changed the rules which made M&S and deminhams guilty. While your average small business has very zero defence, when the tax man comes along he will make all sorts of threats some of which are BS, the big ones usually are fess up and you'll get a smaller fine type lies. It is the same principle as torture in the medeval ages, you say confess! scvm! When they protest their innocence they are taken for a tour of the torture chamber, what do they do? They confess immediately and take the easier route of being beheaded or hanged than be tortured.

In the past a lot of my clients would phone me and they wanted to roll over, but I used to be motivated enough to defend them to the hilt. I remember a particularly insidious tax man who went after this woman who was innocent. He was eying his £1000 bonus. He started to threaten her neighbors and friends, if you don't dob in your mate we'll go after you.

We (me and John) got him fired.

I am no longer motivated to do this as HMRC as per Injin merely changes the rules if they lose to make you guilty.

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We need to ENCOURAGE business.

What part of this sentence the goverment don't they understand?

Or more will just stick money into BTL chasing 2% returns, and just worry about the more straight forward tax levies.

---

Happy New Year From Your Government, here to serve and help you.

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How much more effort is it to claw back billions from thousands of small businesses, rather than go after the likes of Vodafone?

Quite.

The fear, uncertainty and doubt (FUD) goes on. I'm sure putting small firms out of business or wanting to just give up is really going to help the economy.

Still, it's better than having the state apparatus living within its means.

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We need to ENCOURAGE business.

What part of this sentence the goverment don't they understand?

Or more will just stick money into BTL chasing 2% returns, and just worry about the more straight forward tax levies.

On a more serious note. People go self employed because it allowes greater ability to fiddle their expenses and thus this is in effect a reward for the risks that they take (that and the 4% they save on NIC).

What HMRC are in effect doing is playing the unattainable bonus culture which seems to have infected many companies. My current company does not have an unattainable bonus.... because we don't have bonuses in the first place! It's like Gill from the simpsons, he so deparately wants a bit of the ambrosia for once. But HMRC is hoovering up all the money everywhere.

Heh I'll tell you something ridiculous. A friend who phones me for cheap advice (he buys me cases of beer for payment). Did his VAT wrong, he UNDERCLAIMED his VAT after making a mistake. 3-4 years ago you'd correct it and reclaim the VAT. The silly thing is even though it is a mistake in HMRC's favor he is being hit with a massive penalty apparently because HMRC consider this to be purposeful concealment, even though it was to HMRC's benefit.

He has decided to outsource his company in a different tax juristiction because of this.

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I received an email from my accountant this morning telling me they had received notification from HMRC that my account and the account of several thousand SMEs had been compromised and that the Police were investigating.

Is this just an excuse to screw SMEs? Perhaps?

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I received an email from my accountant this morning telling me they had received notification from HMRC that my account and the account of several thousand SMEs had been compromised and that the Police were investigating.

Is this just an excuse to screw SMEs? Perhaps?

Not sure, I've not seen anything on the news wire or abbey tax news about it recently, though to be fair I've not been looking too closely. The (public) news is that HMRC is currently cracking down on hot food places by installing cameras at wholesalers and using ANPR to identity the shop owners vs their invoices.

This is public news and was on Abbey as well as AVN last Thursday I think.

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Terrifying. I've fired a number of accountants who turned out to be incompetent, thinking I would have a go myself.

Tossers are bound to find something to catch me out with.

I'll do the one man limited co thing, but it would be madness setting up a business with a big footprint between the leeches in local and central government.

Edited by Kyoto

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The good news is that don't have enough resources to come after everyone.

I find this war against small businesses so hypocritical. The MPs expenses' scandal was pure tax evasion and deliberate fraud. Most of them got away from it. So far as I'm concerned we should all act in the same way and try to avoid paying tax. The Revenue target small businesses and find minor infringements just to cover the cost of their visit. The small business owner loses hours of valuable working time and needs an accountant present to deal with all this crap, which can cost a few grand. There really isn't any point trying to trade in Britain. If outsourcing doesn't kill you the Revenue will oblige. You could get stung for 7 years if they take a dislike to you. All my businesses were run more efficiently that Great Britain PLC. It reminds me of a fat school bully who's finished all his sweets and now wants the ones you've carefully saved. I say kick the bully in the nuts.

If you do get a visit don't ignore them. Give them a nice cup of tea and biscuits and put them in a nice warm room with a comfortable chair. You need to charm these c**ts. You can always pee in the cup before putting the tea in. :unsure:

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Terrifying. I've fired a number of accountants who turned out to be incompetent, thinking I would have a go myself.

Tossers are bound to find something to catch me out with.

I'll do the one man limited co thing, but it would be madness setting up a business with a big footprint between the leeches in local and central government.

As I said give my mate a call, he is pretty meticulous. I watched him write of £12,000 of time incurred the other day, as one of his clients tends to hog him on the phone all the time asking for advice and or resolving problems.

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The good news is that don't have enough resources to come after everyone.

You're wrong, HMRC since the merger have turned to devious tactics instead. They pronounce you guilty first offer a smallish penalty. While threatening a massive massive penalty if you decide to appeal and lose. They also put the onus of proof on YOU not themselves when pointing fingers.

Back in 2007 or was it 2006 they bought information from Germany. Germany had hired a hacker to look at Swiss bank accounts. The UK government washed its hands of any responsibility since they claimed to be a third party. Simply they had a short amnesty period pay up your tax or we'll hammer you afterwards with massive penalties.

HMRC in their infinate wisdom went after lots of innocent people who merely lived in the same time and shared names of people. They even went after employees which by definition cannot fiddle their taxes! We complained a lot about it and they merely changed the rules to suit themselves and protect themselves from Ultra Vires.

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If you are a self employed small business man, or a sole trader, you already get the sh1t end of the stick.

Even though you pay the same amount of tax and NI as a PAYE employee, [and statistically the Self Employed's earnings are more hit and miss, than the PAYE employees, and they earn less] If you have an accident and lose a limb for instance you are entitled to Nada. Nothing. No Disability allowance from the DWP.

You are also likely to have your home address listed as your business address.

And under Labour, HMRC were given powers to enter your home without prior notice. [As well as the hundreds of stealth taxes, and 'IR' rules they introduced]

These new powers came into force on the 1st of April 2009. The new rules give the tax inspectors from the Revenue side of HMRC similar powers to those Customs & Excise have long had against smugglers.

Basically they can enter your home, and search it, without notice. Whether you are in or not......

F@cking Police State.

266 Ways the Government can Enter your home

[Whatever happened to that Tory David Davis complaining about Labour's Orwellian state?]

Edited by Dan1

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The good news is that don't have enough resources to come after everyone.

I find this war against small businesses so hypocritical. The MPs expenses' scandal was pure tax evasion and deliberate fraud. Most of them got away from it.

+1

The truth is that there was never any political will to enable the average person earning average wage to be able to afford an average house in a rising unregulated market, under a secret expenses system, where MP's were all flipping houses, making hundreds of thousands in personal profits over ten years.

Sir Ian Kennedy, chairman of the new Independent Parliamentary Standards Authority (Ipsa) ruled that Ministers should repay profits on their second homes.

However, that only applies to gains from November 2009!

So profits from massive House Price Increases UP TO November 2009, were locked in.

HPI was all cream for our elected officials.

Not one MP represented the average wage earner.

It is not just that they used our money to profit, and paid no tax on the gains, it is also that it created a dangerous conflict of interest that meant that voting for policies which fed the house price bubble, for so many years, such as keeping IR too low for too long, CGT etc, also generated personal profits for them, in secret.

In any other profession this would be a criminal offence. It is market manipulation. Far worse than insider trading.

And they all walked away scot free, many retiring millionaires from property speculation.

Un-F@ckingbelievable Really.

I do not believe anyone's records are completely perfect. Its probably impossible to do. Ive used chartered accountants in the past, who have had made mistakes, and its had to be pointed out to them by non-accountants. The system is open to abuse, and who trusts the government anymore?

Thankfully, if you have ever talked to anyone who has worked at HMRC, they will tell you, its a complete shambles, and run incompetently.

Edited by Dan1

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You're wrong, HMRC since the merger have turned to devious tactics instead. They pronounce you guilty first offer a smallish penalty. While threatening a massive massive penalty if you decide to appeal and lose. They also put the onus of proof on YOU not themselves when pointing fingers.

Back in 2007 or was it 2006 they bought information from Germany. Germany had hired a hacker to look at Swiss bank accounts. The UK government washed its hands of any responsibility since they claimed to be a third party. Simply they had a short amnesty period pay up your tax or we'll hammer you afterwards with massive penalties.

HMRC in their infinate wisdom went after lots of innocent people who merely lived in the same time and shared names of people. They even went after employees which by definition cannot fiddle their taxes! We complained a lot about it and they merely changed the rules to suit themselves and protect themselves from Ultra Vires.

I stand corrected! It sounds terrible. I'm still on tenterhooks a bit because my company only wound down in 2006. Fortunately my accountant was very professional. I never skimped on my accountancy.

This was one of the reasons I left the UK. These new rules would have tipped me over the edge.

...and just to think, Phillip Green is a much easier target.............but hang on the rules don't apply to the scum floating at the top.

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Heh I'll tell you something ridiculous. A friend who phones me for cheap advice (he buys me cases of beer for payment). Did his VAT wrong, he UNDERCLAIMED his VAT after making a mistake. 3-4 years ago you'd correct it and reclaim the VAT. The silly thing is even though it is a mistake in HMRC's favor he is being hit with a massive penalty apparently because HMRC consider this to be purposeful concealment, even though it was to HMRC's benefit.

He has decided to outsource his company in a different tax juristiction because of this.

What about all the mistakes that HMRC make with forms etc? Anyone else have to constantly call them, and inform them what they have done wrong?

Ive sent in VAT returns, but simply because some data entry clerk has entered my details incorrectly, into the computer, it has been changed from a credit to a debit. So they are chasing me for the payment.

You have to go through a process, then re-do the forms.

Why cant I impose on the spot fines for this?

On other forms HMRC clearly ask for certain figures to be placed in inverted commas, but they have to scan that form into their computer, which does not recognise the commas.

All sorts of crap. Like missing things on your end of year tax return etc..Or sending you the wrong form in the first place.

And its not just a HMRC. ~Its every f@cking ISP, Mobile Phone Company, Utility company, Bank etc.....

You spend half your life, sorting stuff out you should not have to! [Am I alone here?!]

I have a theory that all these little surcharges, that have appeared over the last 5-10 years. I.E. Companies charging for not having a Direct Debit set up. Or suddenly billing you for having paper bills, etc bank overdraft charges etc, only started appearing at around the same time Gordon Brown started introducing hundreds of little stealth taxes.

[Like suddenly not being able to reclaim VAT on certain pieces of capital equipment, like a PC for F'cks sake. etc Or a company car. IR35 rules etc etc]

Big Business just followed the Governments lead.

Its all this kind of stuff that the coalition should be concentrating on reversing.

Edited by Dan1

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How much more effort is it to claw back billions from thousands of small businesses, rather than go after the likes of Vodafone?

Much less. Small businesses can't afford big lawyers.

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http://www.telegraph.co.uk/finance/yourbusiness/8220107/HMRC-to-fine-small-businesses-for-record-keeping-failures.html

So I assume these firms face a fine + paying the taxes which they "owe"?

The taxman cometh for your cash.

Given that these pr*cks can enter your home at will, why aren't they just honest and send squads of thugs around to steal people's TV sets, jewellry and the spare change on the dresser?

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  • 309 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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