Public Notice 160 – Checks into indirect tax matters

I have laid out the procedure that a Public Notice 160 (PN 160) usually follows.

Now, given that this is mainly driven by ex-Customs staff as opposed to ex-Revenue staff, the procedure, in my view, can be aggressive on the part of the officer.

I have been told by an officer, even though I sent a 64-8 appointing me as the agent that it did not mean she had to deal with me and kept harassing my client to attend a meeting even though there is no legislation saying she had to attend a meeting.

I had to impress on the officer and her team leader the fact that it was not only discourteous but unprofessional and finally they realised my client was not going to attend a meeting. In fact I sent them the article by Dave Hartnett about trust between HMRC and advisers.

So, although I can tell you the procedures as follows depending on the officer will depend on actually how it runs and I go back to my original statement:-

ALWAYS GET REPRESENTATION FROM DAY ONE PRIOR TO CONTACTING HMRC.

Ask the person you want to appoint whether they have had experience in the type of enquiry and if you are not happy then look for someone else.

I was asked recently if I could give a couple of references to a lady who came to see me.

I obviously had to ask a couple of clients who were delighted to speak up for me and now the lady is a client of mine.

This is the first time it happened to me and perhaps it is a good idea for anyone seeking an agent.

Call 0800 471 4546 NOW for professional advice and representation for your tax investigation.

What is a Public Notice 160?

A Public Notice 160 deals with cases where HM Revenue and Customs (HMRC) have reason to believe that dishonest conduct has occurred. This notice covers all indirect taxes other than Stamp Duties, Customs duties and import VAT.

HMRC will normally ask you to attend a meeting so they can tell you that the check is not being conducted with a view to prosecute and explain to you the matters that are the subject of the check.

This means the behaviour and period under enquiry, not the specific information that HMRC hold that gives rise to their suspicion of dishonesty.

KinsellaTax highly recommends that anyone under investigation by HMRC does NOT attend any meeting.

You will be given an opportunity to disclose any irregularities in relation to your tax affairs. Although HMRC may not be able to deal with these irregularities as part of the PN 160 check, they may be investigated separately with a view to prosecute if appropriate.

HMRC may find it necessary to make further checks. If they need to do so, they should explain the compliance checks process to you and the steps that need to be taken in order to ascertain the facts. They will invite you to make payments on account towards any tax arrears, throughout the check, which will reduce any interest charges.

If the Revenue decides that any tax arrears are due to dishonesty or deliberate behaviour, they will consider whether you should pay a penalty.

The law on penalties for irregularities has changed.

If HMRC discover irregularities due to dishonesty, a civil evasion penalty will usually be applied.

For irregularities identified due to deliberate behaviour, a penalty for deliberate inaccuracies or a penalty for deliberate and concealed inaccuracies will be charged. The penalty applied depends upon the tax period in which the irregularities occurred.

At the end of any HMRC check, they will take into account the extent of your co-operation.

Please remember that during any HMRC investigation the officer dealing with your case should always be courteous, fair and professional.

If you have received a Public Notice 160 from HMRC then contact KinsellaTax IMMEDIATELY on 0800 471 4546.

Civil Evasion Penalties

For VAT irregularities involving dishonest conduct that relates to returns or documents due to be sent to HMRC before 1st April 2009, a civil evasion penalty will be applied and can be up to 100% of the tax evaded.

For indirect tax irregularities other than VAT due to conduct involving dishonest conduct that relates to returns or documents due to be sent to HMRC before 1st April 2010, a civil evasion penalty will be applied. This can be up to 100% of the tax evaded.

Penalty for Inaccuracies Rules

The Penalty for Inaccuracies rules apply to value added tax irregularities in returns or documents with a filing date on or after 1st April 2009 where the return covers a tax period beginning on or after 1st April 2008.

For indirect tax irregularities other than VAT these rules apply to returns and documents for a tax period beginning on or after 1st April 2009 that are due to be sent to HMRC on or after 1st April 2010.

A taxpayer may be charged a Penalty for Inaccuracy if they give HMRC an inaccurate document which leads to:-

  • An understatement of the person’s liability to tax
  • A false or inflated statement of a loss by the person
  • A false or inflated claim to repayment of tax

And the inaccuracy was:-

  • Careless
  • Deliberate
  • Deliberate and concealed

Penalties for careless inaccuracies may also be charged where appropriate.

A penalty for a deliberate inaccuracy will normally apply where you purposefully:-

  • Understate the tax you owe
  • Choose to misrepresent your liability
  • Overstate a claim

A penalty for a deliberate and concealed inaccuracy will apply where you actively take steps to cover up a deliberate error.

ALWAYS GET REPRESENTATION FROM DAY ONE PRIOR TO CONTACTING HMRC.

The maximum and minimum penalty for each inaccuracy depends on the behaviour that caused it:-

  • Inaccuracy despite taking reasonable care:               NO PENALTY
  • Careless inaccuracy:                                                  between 15% and 30%
  • Deliberate inaccuracy:                                               between 35% and 70%
  • Deliberate and concealed inaccuracy:                       between 50% and 100%

The figures are percentages of the tax lost.

It is the taxpayer’s decision as to whether they co-operate with any HMRC check. However, you must remember that if you do you should be truthful as making false statements may render you liable for prosecution.

If you do choose to co-operate and disclose details then you may significantly reduce the amount of any penalties due.

At the end of any HMRC check, they will take into account the extent of your co-operation.

kinsella_remarketing_banner-300x250-1

We're here to help you. Call 0800 471 4546 for free confidential help and advice 24/7
or fill in your details below.





Enter captcha below:

*Please do not use this form to report suspected tax fraud or evasion or to sell your own services.

kinsella_remarketing_banner-300x250-2
Translate »