HMRC Investigations And A Fishing Expedition: Mr Oliver And Mr Elliot Chat

Mr Elliot I have a client…

Not before time.

😡

As I was saying, Mr Elliot, before your irresistible charm sprouted, I have a client…

Yes?

… who is being investigated by Her Majesty’s Revenue And Customs …

HMRC?? The abbreviated version works for me.

😂

I am grateful. And they have been in touch asking for information.

And so you said?

Their request ran to several pages which I thought was excessive, so I responded suggesting to them that they were on a fishing expedition.

And.so.they.said?

Mr Elliot, this is not Family Fortunes – please take it with the utmost seriousness. Because there is a serious amount of tax involved here. They persisted with their request.

Mr Oliver, HMRC ask you for information to investigate a tax return and you respond saying “you are on a fishing expedition”.

🎣

Is that what you are seriously telling me?😲

Hang on!!

👿

I am your business partner. I will NOT tolerate condescending cross-examination from you as you punctuate the end of your sentences with words like “Is that correct”.

My apologies, permit me to rephrase the question getting right down to the brass tacks. Did you or did you not suggest to HMRC that they were on a fishing expedition. Yes or No❓

Yes.

Mr Oliver, remember from the Art Of War that the best way to win is not to fight. If you scramble to your dictionary of defensive expressions, all you might achieve is winding up the inspector. The application of the expression ‘fishing expedition’ is in respect of discovery applications in litigation proceedings; it has no application to an HMRC information gathering exercise to test a tax return.

Challenging the inspector is not to wind him or her up.

Yes but the denial of the information is likely to excite further interest in it. Why would it be resisted?

Well, that may be so but they are not entitled to anything and everything.

What other explosive 💣expressions did you hurl in their direction?

Instead of asking for a list of information that was a long-winded way of asking for every conceivable document the client had ever seen, that they be specific about what they wanted.

Another gem to join your fishing focus. How on earth is someone who has no prior knowledge and who is not clairvoyant 🔮 able to be specific? Please tell me.

You sound like you are working for HMRC not the client Mr Elliot.

Did you ever read Nicholson v Morris? I’d encourage you to read it or see if you can catch 🎣 another of those tax courses so that you will come to terms with the duty of a taxpayer to come clean to HMRC.

In the case of Nicholson v Morris (HM Inspector of Taxes) 51 TC 95 it said:

… the Taxes Management Act throws upon the taxpayer the onus of showing that the assessments are wrong. It is the taxpayer who knows and the taxpayer who is in a position (or, if not in a position, who certainly should be in a position) to provide the right answer, and chapter and verse for the right answer, and it is idle for any taxpayer to say to the Revenue, “Hidden somewhere in your vaults are the right answers: go thou and dig them out of the vaults.” That is not a duty on the Revenue.

⛏️⛏️⛏️ Digging through the vaults!!!

I do not know from where you *dig* up this kind of stuff but seriously, you 🔊 🔊 🔊 CANNOT be serious man!

HMRC is not entitled to anything and everything … surely?

Mr Oliver, caaalm 😶‍🌫️ yourself. You’re an exceptionally excitable chappie today, aren’t you. If it requires you to take some medicament 💊 then so be it.

You ought to be well aware that under paragraph 24 of Schedule 18 of Finance Act 1998, HMRC can open a tax investigation into a company tax return (subject to time limits varied by amendment or late filing of a return) within 12 months of the date of the return being filed.

And don’t call me Shirley.

Yes, so what?

Well, if you are served with an HMRC Tax Information Notice it could give rise to UNLIMITED fines if it is not properly complied with.

That sounds inherently improbable. Un-Limited fines?! 😨 Surely not.

Perhaps you would like to ask Mr Mattu?

Whose he?

Mr Mattu from Revenue and Customs v Sukhdev Mattu [2021] UKUT 245 (TCC)  Mr Oliver in which the following was mentioned:

… Parliament has created a unique jurisdiction of the Upper Tribunal to impose an unlimited tax-related penalty in cases of serious non-compliance.

😧

Are you alright Mr Oliver? You look like you have seen a ghost.👻

Thank you errr Mr Elliot … I … have a client I errrr errrrrr urgently need to see.

Let me know what fee 🧾you haul in here. It is about time you added more to our bottom line 📚 …

Oh, and Mr Oliver …

Yes?

Please no more cute comments for HMRC, please. The judges do not seem to like it, HMRC won’t like it and frankly neither do I.

Take careful note of Crypto Open Patent Alliance v Wright [2022] EWHC 242 (Ch) 🧒:

The problem is that this case is an example of what I would (unhappily) call bad-tempered litigation, which is regrettably becoming more and more prevalent in the English courts. It somehow seems to have become acceptable for solicitors to become mere mouthpieces for their clients to vent their anger at their opponents. It is not enough for the clients to dislike or even hate each other: the solicitors must do so too. I simply do not understand why in 2022 professional, trained lawyers, who should know how to stand up to their clients, and concentrate instead on what is important in the litigation, think it is appropriate to behave like schoolchildren in the playground.

Bye …

Will, he ever learn I wonder 😕 ??