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Online access
For quite some time now we have sent our forms 64-8 for new clients to HMRC’s central agent authorisation team in Longbenton. However, we never received any acknowledgement or reply.
Indeed, if we attempt to access the records of that client online, possibly many months later, we learn that the said person has not been recorded as a client of ours.
If we query this with the local tax office their reply is that for each new client we need to telephone the online helpdesk on 0845 605 5999. Do we really have to make that call on a client by client basis?
While an immediate review of an account online can answer a query and therefore save costs for HMRC and ourselves, the necessity to call the helpdesk as a preliminary, and then await developments, will cancel out any benefit.
Several years ago now we provided HMRC with a complete list of our clients so that those who had not been authorised for online access could be updated.
After quite a lot of work by the department online access was authorised, so I am staggered to find that we may have to go through this procedure again.
Is it really true that HMRC are unable to record agents on their computer system in a unified manner which allows online access?
Query 17,496 – Delayed.
Repaid repayment
My client’s 2007 tax return was prepared by a reputable firm of London accountants, but may not have been actually sent to HMRC. However, the tax due of approximately £4,000 (there were no payments on account due) was paid prior to the deadline of 31 January 2008.
I prepared and submitted her 2008 tax return in January 2009. Much to my surprise, a month later the client received a tax repayment of approximately £4,000. It was only when a determination for the 2007 tax return was sent to me that I realised something was amiss.
It seems that the 2007 tax return was never received by HMRC. I obtained a copy, had it signed and submitted to the department and the tax was then repaid to HMRC.
I assumed that this would be the end of the matter, but the client then received notification of two 5% surcharges and interest. I do not believe that surcharges should be applied as my client had actually paid the 2006/07 tax by the due date of 30 January 2008.
We accept that some interest would be due, but not calculated back to 31 January 2008. Despite numerous appeals and an independent review by HMRC, I have now had to list the matter to be heard by a tribunal.
Am I right in thinking that surcharges can only be applied if the tax has not been paid by the due dates (TMA 1970, s 59C seems clear on this point) and should not the interest calculation take into account that for at least 12 months (January 2008 to February 2009) the tax had been paid?
I wonder if this problem is caused because the original (unallocated) tax was repaid before the duplicate 2007 tax return was ‘captured’ by HMRC. The computer then automatically calculates the interest and surcharges.
I would appreciate readers’ views.
Query 17,497 – Also Hurt.
Mother’s trust
A mother has just set up a bare trust for her daughter who was born in 1995. A trust deed has been drawn up along with a deed of gift/declaration of trust by which 55% of the beneficial ownership of a freehold property worth about £300,000 was transferred into the trust. The only other trust asset is £10 cash.
A bank account is being opened by the trustees, who will receive around £900 rental income per month while the house is occupied by the mother, who is the legal owner of the property and the donor of the 55% interest, to avoid any possibility of a reservation of benefit argument for inheritance tax.
The disposition should be covered by statutory reliefs, but the family wish to make the rental payments in any event to avoid the point being raised.
The mother has a terminal illness. Following her death, the property will be sold and the trust’s 55% interest will be invested to produce an income.
I believe that for tax purposes the trust assets and trust income belong to the minor and there will therefore be no need to complete form 41(G) or otherwise report the existence of the trust to HMRC. Is this right?
While she is alive, will the trust income be taxed at the minor’s tax rates or will the settlor-interested rules apply?
Finally, will a trust tax return or personal tax return be required while the mother is alive?
All thoughts on these matters and any other relevant issues would be welcome.
Query 17,498 – Dee.
Unexpected tax
My husband and wife clients are retired and are not liable to tax. In 2008/09 they invested in a one-year account at the Post Office and signed forms R85 to have the interest paid gross.
The account, which was apparently with the Bank of Ireland, has recently matured and, according to a certificate of interest paid that they have received, tax has been deducted.
The bank says that it has no trace of the forms R85 and the tax must be reclaimed from HMRC. However, my clients do have a letter of acknowledgement of the forms from the Post Office. The amount of tax is significant for my clients.
Will my clients have to wait until after 5 April 2010 to reclaim the tax from HMRC or could the bank refund the tax now?
Readers’ advice would be appreciated.
Query 17,499 – Pensioner.
(Priority will be given to replies to this query that are submitted by newcomers to Readers’ Forum.)
