It came as a big surprise to the Bar. HMRC has identified the London Bar amongst their main targets for 2013.
The Chairman of the Bar, together with representatives from the Bar Council’s Remuneration Committee, rushed to meet with the HMRC top guns. ‘Why pick on us?’, was the implication of the first question asked. But the answer was not what was expected. Whilst the big wigs thought that the motivation was big bucks, the truth of the Bar’s transgressions was humiliating.
- Failure to change from the income tax cash basis to the earnings basis at the correct time;
- Omission of the catch up charge instalments following that change;
- Incorrect calculation of earnings due to mistakes in the assessment of work in progress and completed but unbilled work – recognition of debts, calculation of completed work (UITF40) etc;
- Omission of ancillary income from returns (VAT of Self Assessment) such as income from property or authorship;
- Failure to make returns (both VAT and income tax self-assessment);
- Failure to pay tax (including VAT) when due;
- Failure to notify chargeability to / register for one or more taxes (including national insurance contributions);
- Continuing to charge VAT under a de-registered VAT number (the VAT number is often de-registered due to the individual failing to make returns).
As we approach that time of year when the VAT returns coincide with the tax returns, now is the moment to take stock – and perhaps get some professional help. Those who fail to make their tax returns and payments may just as well place a big flashing beacon on their file.