This is not a case of Tony at the ICPA trying to do HMRC down – these are in fact the words of Judge Wikeley in the Upper Tribunal case of VO v HMRC in September this year. The full text of the ruling is available online and I don’t want to cover all the details, but the Judge also said that such incompetence and inefficiency “could well have led to injustice were it not for the persistence of the appellant”.
Seriously, this case makes astonishing reading. Some bits stand out like a Belisha beacon, lighting the way to what HMRC really think and feel about small businesses. Para 43. states that HMRC, in a letter regarding what counts as work, “stated that hours spent networking and promoting your business did not count”. And how about para 37: “Why am I satisfied that HMRC lost or mislaid the evidence? In earlier correspondence the Appellant very generously refers to the possibility of her documents as either having been mislaid by HMRC or lost in the post. Bitter, albeit anecdotal, experience in other appeals makes me conclude it is more likely that HMRC mislaid the documents than the Royal Mail lost them.”
This was a case about working tax credit and child tax credits and a claimant who was making minimal claims against the state to help.
Yet HMRC decided to reject the claim, incorrectly as the Judge has pointed out, and without the backup of information that was not recorded within the system, for some reason or other.
In the same month as the Paradise Papers are making the headlines, here we have the full might of the state directed against a taxpayer over tax credits.
It makes you stop and think for a moment, doesn’t it? If HMRC take on board the Judge’s comments and all fair criticism going forward then rather than having headlines like this, maybe we can all be reading headlines praising HMRC and their staff in the future. Honestly, this is easily achievable – all that’s required is the humility to listen, to respect the wishes of taxpayers and their Agents and to treat each taxpayer on their merits, not as part of or drivers of a supposed small business tax gap.
• Tony Margaritelli, Chair, ICPA
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