HMRC – What would you do with a $2.4m tax bill?
Posted: Wednesday 4 January 2012
A recent article about the Chinese artist Ai Weiwei has caught our eye. Ai Weiwei was faced with a $2.4m tax bill, and despite lodging an appeal against the accusation that he is guilty of tax evasion, he has had to pay a $1.3m bond to the Chinese government. You can find out more from this news story on the BBC website here.
The UK appeals system is somewhat more straightforward, with HM Revenue & Customs (HMRC) in charge of collecting UK taxes. Taxpayers may pay income tax by filing a self assessment tax return, or making payments directly through the Pay As You Earn (PAYE) scheme. Paying tax through PAYE means that your employer or pension provider deducts tax from your salary or pension before you receive it. Taxpayers may also pay have tax on interest deducted at source, or tax on UK dividends.
Should you disagree with a decision regarding your own tax liability (e.g. you think that there are mistakes in the amount of tax they have asked you to pay), you can write to HMRC detailing what you wish to amend and when any error occurred. If you know, you should also tell them who you dealt with and how you would like them to deal with your complaint. HMRC will then look at your complaint and decide whether or not there has been an error and whether any expenses will be paid.
If you are still unsatisfied with HMRC’s decision and have a right to appeal you can do so by writing to HMRC who consider the reasons for the appeal and decide whether (and if so, how) a decision can be amended. If an appeal cannot be settled with HMRC you can ask for a review by an HMRC Adjudicator or it can be referred to an independent tribunal. Individuals do not have to appeal or ask for a review personally: a solicitor can do this on your behalf, and Morton Fraser’s Tax team can assist with the appeals process.
Throughout the whole appeals process, HMRC request that you continue to pay any taxes that are due, otherwise interest or penalties may be charged.
For further advice on tax generally, you can contact Sarah McKinlay, who is a Partner in the Private Client Division at Morton Fraser. She can be contacted on sarah.mckinlay@morton-fraser.com or 0131 247 3150.
