What’s new in the world of tax

Model accused of tax evasion

Israeli supermodel Bar Refaeli has been accused of tax evasion, with Israeli tax authorities claiming she dodged tax on income totalling nearly £7m between 2005 and 2012 by hiding money in offshore accounts and shell companies. She argues that she was not a resident of Israel for most of the period, with the family of Oscar – winning actor Leonardo DiCaprio, her former partner, to provide testimony over the relationship.

Bent bankrupt

Former Premier League striker Marcus Bent has been made bankrupt in the High Court after failing to pay HMRC “millions” in tax.

Ooops – Revenue staff accidentally paid too much

HMRC employees were accidentally overpaid by £1.3m extra last year with nearly 250 members of staff finding payments amounting to more than £1,000 in their pay packets.

Ronaldo agrees to €19m tax fine

Cristiano Ronaldo has agreed to a fine of almost £17m, and a suspended jail sentence, after being convicted of tax fraud in Spain. The Portugal international avoids prison as, under Spanish law, a first offender can serve anything less than a two-year sentence under probation.

HMRC apologises for late-payment errors…but not for other mistakes

HMRC has apologised for two mistakes over late-payment fines. Initially HMRC denied fining taxpayers for failing to submit their self-assessment returns online – more than two weeks before the deadline. But HMRC then admitted that some people have been wrongly charged. It has promised to cancel the penalty charges and apologised for the error.

But unfortunately, to compound this mistake, a further catalogue of errors has been identified.  HMRC is mixing up English and Scottish taxpayers, with incorrect calculations for Scottish taxpayers being issued on the basis that they are resident in the rest of the UK and vice-versa. The ACCA and the ICAEW have received reports of paper returns not being processed accurately and pages being omitted. In addition, calculations are being incorrectly amended for in-year coding adjustments and estimated in year adjustments are being treated as actual underpayments of tax when returns are submitted, which has the effect of overstating a person’s tax liability.

Chas Roy-Chowdhury of the ACCA said: “HMRC is prone to mistakes…. a government department should not have a one-way ticket to penalise taxpayers when we can get no recompense when it makes a mistake.” Meanwhile, The Federation of Small Businesses is urging HMRC to be lenient with sole traders who submit their tax returns late or incorrectly.  Mike Cherry, national chairman, said HMRC should “have a good look in the mirror” when considering taking action against taxpayers.

Accountant stole £600k from singer

The accountant for X Factor winner James Arthur has been jailed for four years after swindling the singer out of £600,000. Mark Livermore stole the money to finance a gambling addiction. He is now banned by the Financial Reporting Council from future employment as an accountant.

Gallopin’ Gorgons! (as Hagrid might say)– Harry Potter star loses appeal to taxman

Harry Potter star Rupert Grint challenged a ruling denying him a £1 million tax refund.  A tax tribunal previously rejected the actor’s appeal against an HMRC block on him using a change in accounting dates to shield his earnings from a higher tax rate. Grint, (or Ron Weasley as he will be forever known to some), who is estimated to have earned around £24 million from the Harry Potter films, took his legal battle to the Upper Tribunal in London. Unfortunately the UT has ruled against him too, dashing his hopes of a tax saving. Great sizzling dragon bogies…

Still smarting from your 31 Jan tax bill?  Spare a thought for those with liabilities in the millions

There are at least 50 UK-based taxpayers who have paid in excess of £12m each to HMRC in the past year, according to a listing by the Sunday Times.  Heading the table is retail entrepreneur and octogenarian Stephen Rubin, owner of JD Sports via the Pentland Group, who paid £181.6m, (£497,570 a day!!) on wealth of £2.8bn.   Second is Denise Coates, who heads up the Bet365 gambling operations, and who is reckoned to have paid some £156m in tax on an estimated £5.75bn. Next up is Sir James Dyson and family, who contributed £127.8m from £9.5bn, with financier Bruno Schroder in fourth place paying £114.3m.

Weirdest tax return delay excuses

HMRC has revealed some of the stranger reasons people have given for why their self-assessment tax return was filed late. One taxpayer claimed they were delayed by a witch’s curse put on them by their mother-in-law (!!) Another person said they were unable to submit paperwork on time as they had been busier than normal due to issues with their maids, and another said they couldn’t file because they were “too short to reach a post box”. One individual blamed their junior member of staff for registering their client in self assessment by mistake because they were not wearing their glasses. One taxpayer even claimed that their fingers were too cold to type after their boiler had broken down. Worth a try I suppose, but ultimately not successful…!

Please click here to go back to other Taxing Times stories…

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Aug 18

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