HMRC... it giveth and it taketh away, apparently
Good morning everyone, and welcome to Tuesday's dip into the news from the worlds of accounting and finance.
First up today is HMRC. This headline stood out by some considerable distance: "Accountants face increased HMRC demands for client information."
According to Accountancy Daily: "HMRC requests to accountants and other advisers for confidential information on clients it wants to investigate for suspected tax crimes has hit a new high, with over 1,500 production orders issued last year, according to professional services firm RPC."
Tax crime probes
Requests were up 19 per cent, from 1,276 in 2015-16 to 1,507 in 2016-17. The spike follows the 2015 decision to provide an extra £800m for a target of tripling the number of tax crime probes by 2020.
On the face of it, fair enough. But, as RPC's Adam Craggs says, it's quick and easy for HMRC to issue the orders. For the accounting firms involved? Not so much.
"It is a huge burden... These investigations can take several years to complete and can cause serious business disruption to both suspects and their professional advisers," he says. And, of course, failure to comply with an order is not a smart move.
Money-laundering claims
So that's that headline out of the way for the time being. Next up is this one: "HMRC accused of blocking probe into Tory donor Lycamobile... taxman rejects French request to raid telecoms group on money-laundering claims."
This all comes to light after an investigation by news website Buzzfeed (France) claimed to have found all sorts of financial wrongdoing at Lyca. The company denies everything and is suing the site for libel.
But it does appear that HMRC refused to help France's authorities a couple of years ago, saying, in correspondence with the French tax authority, that the group in question was a significant Tory party donor. And it was, to the tune of £2.1million. To be fair, HMRC also said the French case lacked substance.
Completely inappropriate
Nicky Morgan, Tory MP and Treasury committee chair tells the FT: “This clearly raises all sorts of questions and is completely inappropriate. I would expect the committee to look into this as part of our economic crime review and to have some early questions for HMRC about the correspondence that they sent.”
HMRC says the content of the correspondence is "regrettable". “We never take political donations into account when working out how to work with other countries, or indeed on our own, in enforcing the tax law. But I can see how this is open to being read that way, which is why that should not be in there.”
Making tax digital
OK, that leads us nicely to Making Tax Digital.
Intuit QuickBooks has prepared a great guide for accountants. It's called: "Start preparing your clients for Making Tax Digital." And this is what it offers: "Our free marketing kit has been designed to equip you with the tools that will help your clients successfully tackle MTD."
It seems to do what it says on the tin. Check it out here.
