WEALTH GENERATION TERRORISTS

Under neon loneliness –Self Assessment deadline looming

It’s that time of the year again when the annual tax return deadline becomes the main focus for tax advisers and accountants, as well as many taxpayers (or ‘customers’ as HMRC calls them).

Vincent Costello Senior Manager vincent.costello@etctax.co.uk

For the large majority of taxpayers their annual tax compliance, although sometimes daunting to the untrained or unfamiliar, can be relatively straightforward to manage. Having a suitably experienced professional in your corner can take stress away of knowing what to put where or determining what is taxable or allowable.

Some taxpayers do an excellent job of managing their tax affairs independently or with very little assistance. However, for a particular group the need for an adviser becomes almost inevitable if not an absolute requirement. These individuals are referred to by HMRC as ‘wealthy individuals’ and have their personal tax compliance looked after by a designated individual in a specialist HMRC unit. The aptly named ‘Wealthy Team’ sits in the Customer Compliance Group.

Feudal serf to spender – So what is a wealthy individual?

To be classed as a wealthy individual in the eyes of HMRC there are a couple of entry levels to gain access. HMRC define ‘wealthy individuals’ as those who have had income in excess of £200,000, or assets equal to or above £2million in any of the last 3 years. It is estimated that there are approximately 800,000 wealthy customers.

Your joys are counterfeit – What is the purpose of this elite team?

HMRC have determined that wealthy individuals present a higher risk of error than other customers as the amounts involved are greater. Because they have the opportunity to invest in more than one country, their tax affairs are much more complex.

A Customer Compliance Manager (CCM) is assigned to a taxpayer dealt with by this unit, with the task of developing an in-depth understanding of the individuals finances and behavior. They review the tax returns alongside the intelligence HMRC has gathered from the UK and overseas sources.

Individuals dealt with here and are more likely to receive a Compliance Check into their tax return, with some individuals having multiple years under investigation at the same time.

To discuss how ETC can help with your tax questions call the team on 0161 711 1320 or email enquiries@etctax.co.uk

This wonderful world of purchase power –the importance of an experienced adviser

Life sold cheaply – you get what you pay for (most of the time) the

HMRC has access to vast amounts of data and intelligence, more so than ever before. So, does it give HMRC the advantage and are we on a level playing field?

The answer depends on several factors, so only sometimes. It pays to have the right person in your corner, as with most things. Who best to challenge HMRC and defend your or your client's corner than a fully qualified tax adviser who has experience in preparing complex tax returns and has dealt with HMRC's wealthy team and CCMs regularly?

How to approach such tax returns is always a matter of risk. Most accountants we come across have clients that are deemed 'wealthy', but only a few have the confidence to go up against an experienced CCM. Or they don't have the relevant experience required for completing complex tax returns.

More than 12 million tax returns were submitted by taxpayers for the 2020/21 tax year. The wealthy team are therefore dealing with less than 10% of the population. HMRC activity in checking tax compliance is on the increase and with penalties for inaccurate returns being as high as 100% (or 200% if there is offshore non-compliance) of the potential lost revenue it is imperative that advisers and clients are represented in the best possible way. HMRC are gearing themselves up to wage war and are under political pressure to increase tax yield and close the tax gap.

31 January is very close, and the pressure to get returns done and can sometimes lead to inaccurate submissions.

ETC Tax has a highly professional tax compliance team, with experience of dealing with wealthy individuals and HMRC’s wealthy team, both in terms of return preparation and dealing with compliance checks.