Revenue Inquiry Work
DEALING WITH REVENUE INQUIRIES
‘Si vis pacem, para bellum’ (‘If you want peace, prepare for war’) – Vegetius, 4th century
Why use David Kirk & Co. Ltd.?
Because we generally win – that’s why! Well over a third of our business comes from Revenue inquiries, and frequently in cases where there is some uncertainty as to the law and considerable risk to the business.
With PAYE, National Insurance and the Construction Industry Scheme, you are required to pay tax on other people’s income besides your own, and if you get something wrong the extra money required to put it right has already gone to somebody else. That is why inquiries in these fields can easily cause bankruptcy.
Dealing with a Revenue assault effectively requires above all the right strategy. There is no single solution that fits every case; however, it is our belief that where we have won significant victories against HMRC it is because we have had the right strategy from the beginning and followed it through. We are particularly effective in cases that have significant uncertainty about the tax law in question, or where director- or partner-level attention is required on a continuous basis. All work will either be done by David Kirk in person, or by other specialists chosen by him for their particular expertise.
Some seven-figure success stories
Accommodation benefit. Our client was an employment agency who provided housing as well as work for migrant workers. HMRC considered the housing to be a taxable benefit and sought to assess PAYE and class 1A NI. We resisted this on the basis that the workers were not employees (easy) and nor agency workers within the meaning of the tax legislation (much more difficult), and so the PAYE and class 1A rules did not apply. Tax saved: £2.75 million (based on our estimate of what was at stake).
Managed service company. Our client was an umbrella company active in several sectors, including construction and medical. HMRC asserted that it was a managed service company (MSC) – a deadly status that gives the directors personal liability for PAYE. We resisted an Information and Documents Notice on the basis that HMRC had already decided (in a VAT inspection) that the company was providing services and not staff, which is incompatible with MSC status. HMRC backed off after an action had been lodged with the Tax Tribunal. Tax saved: £14 million (HMRC estimate of the amount at stake).
Construction Industry Scheme (CIS). Our client was an employment agency active in the construction sector, and had been failing to operate the CIS in its payments to umbrella companies. HMRC were claiming substantial sums on the basis that if one payment under a particular contract was caught, they all were. We analysed the contractual relationships, and defended the client on the basis that there were no contracts with the umbrella companies at all. Tax saved: £1.1 million (based on HMRC’s initial demand).