.png)
.png)
HMRC priorities
I refer to Andrew Hubbard’s interview with Joanna Rowland (Taxation, 16 May 2019, page 18). Her comments show a complete misunderstanding of the time that it is taking to deal with the administrative process for Making Tax Digital for VAT (MTD).
As far as Joanna is concerned, all the advice from the stakeholders regarding compulsion are cast aside in favour of the benefits forecast to accrue to the funds flowing to HMRC. The cost in time and money to small business is ignored in the quest to ‘make great strides towards the world’s most digitally advanced tax authority’.
In this connection, I would refer to a letter in The Sunday Times of 16 June from Simon York director of HMRC’s fraud investigation service where he states: ‘It was HMRC that led the way in tackling carousel fraud, working with international partners to disrupt the efforts of criminal gangs. It means the UK’s losses from this type of VAT fraud have fallen from about £3bn to £٤bn in ٢٠٠٦ to about £٢٥٠m a year today – money that has been spent on funding public services, rather than lining the pockets of criminals.’
How much money has HMRC lost between 2006 and 2019? And how much time has it spent on devising MTD that should have been spent fighting existing fraud in the system? There just does not appear to be the appropriate expertise in the administration of the tax system at present and the country will continue to suffer from a ‘tax gap’ brought about by the creators of this mayhem, not the poor compliant businesses.
Robin Summers. Summers & Co.
Trust register
I refer to the news item ‘Anti-money laundering’ (Taxation, 2 May 2019, page 4). I have to say that the requirement to register a new trust (after 1 April 2020) within 30 days is in most cases impossible. Most trusts are created on death by the will of the testator and, in accordance with IHTA 1984, s 83 for any relevant property trust, the trust commences on death.
With the passing of a relative there is and must be a time for grieving, the funeral and family time and most families don’t even think about going to a solicitor for at least a month, nor will they necessarily know what was written in the testator’s will. It would therefore seem to be the case that all HMRC and the Treasury is interested in doing is fining somebody, their executors or trustees for not giving notice to HMRC of their imminent death so that the will trust can be registered within 30 days.
Further, it is mentioned that HMRC will require all trusts to register whether or not there is a tax consequence. This is something that clearly has not been thought through.
I provide tax assistance to several firms of solicitors and, in a considerable number of cases where we deal with the death of the surviving partner to a marriage, we have no idea whether the partner that died first left a nil rate band (NRB) trust or not. We have to research this point to see how much, if any, of the NRB had been used for transferability to the death of the survivor and often the families are surprised to learn that an NRB trust was in existence with just a small (by today’s standards) IOU as its only asset. The death of the former spouse may have been 20, 30, or 40 years ago so who keeps these records when families move to another part of the country and the original solicitor is long forgotten. There must be thousands of these temporary dormant trusts whether they are known about or not.
My point is, therefore, that no family is likely even to be aware of such an NRB trust being in place, these being extremely common in the days before the transferability of the NRB to the surviving spouse’s estate. Therefore, as these trusts will only come to light on the second death, I see this as yet another excuse to fine innocent people – making their grieving much worse.
While anti-money laundering is nowadays essential, it is overly burdensome to the average person (and their adviser) who is completely law abiding and, in most cases, they don’t even know what money laundering is.
Alan G Poole, A & J Tax Management Services.
