Chris Edge – HMRC
Steph Malone – HMRC
Bill Martin – HMRC
Alice Gunn – HMRC
Mike Dodd – HMRC
Simon Galloway – HMRC
Ed Dwan – Ernst & Young LLP
Jim Boyd – BDO Stoy Hayward
Mark Levitt – Hazlems Fenton
Neil Grant – Coutts & Co
Ian Haughton – Grant Thornton
Susan Mackenzie – Philanthropy UK
John Foxon – HSBC
Tal Kalsi – Chiltern PLC
Andrew Meeson – A.T.T.
Sarah Wulff-Cochrane – B.B.A.
Brendan Fox – Lloyds TSB Bank PLC
CE welcomed everyone to the meeting and gave apologies from the Chair (Keith Williams) who was unable to attend the meeting due to illness.
1. Position of Co-Chair – this was on the Agenda for today.
2. Publication of the criteria used by HMRC in deciding whether a customer should be brought into a CPR team. CE advised the details held on HMRC website by searching CPR.
The CPR teams deal primarily with people whose self assessment tax returns
show particularly complex features such as large amounts of foreign or trust
income, residence and domicile issues, employment issues, significant Land
and property income or significant Capital Gains/losses or particularly high
income or wealth.
ML had also searched HMRC webpage and had found further clarification.
3. Members to let KW have any further thoughts that may be useful to the internal HMRC review of the Wealthy/Complex. – None were received.
4. Members were asked to complete and return the HMRC questionnaire to Debbie Sharples (now Green). This was on the Agenda for later.
In addition to these there was also an action point carried forward from a previous meeting in relation to whether HMRC had a family tree setting out all the various customer fora and how they fitted together.
CE advised that they didn’t but handed out copies of the names of the various fora and which customer group they represented. – See attached.
CE advised that no-one had volunteered or been nominated as co-chair and unless some one was willing to put their names forward today she did not propose to keep adding this on as an Agenda item and would therefore assume the members were willing for KW to continue as Chair. She added that it was very beneficial for the forum to be co-chaired by someone in addition to an HMRC member. The group agreed to revisit this in 6 months.
Action point 1. Appointment of Co-chair carried forward.
CE advised that CPTT are currently reviewing its targets and measures in respect of SA processing and dealing with external correspondence. It currently uses the Departmental targets and measures but what isn’t clear is whether our customers feel these measures are important. CPTT are currently reviewing these to ensure they are customer focused.
For example our target for dealing with post is 75% in 15 working days and 95% in 40. This includes the simplest item – a claim to adjust Payments on account to a more complex letter in relation to an ongoing enquiry.
Do our customers expect the latter to be responded to fully within 15 working days?
The questionnaire is designed to gather some customer feedback to help us with our review.
CE thanked those who had returned these but added that copies had been provided for completion at the meeting for those who had not had the opportunity to complete them.
SM gave a power point presentation (see attached) explaining the CPTT Risk Strategy.
Questions arising from the presentation were as follows:
| Question | Answer |
|---|---|
| AM - Is the selection/de-selection of customers on risk grounds rather
than customer focus.
|
SM – No customers are brought into CPTT because they are wealthy/ complex and because of this capture of their returns can be difficult. Bringing these customers within one of CPTT teams means we can provide a more customer focussed approach to capture. But because we have limited resources we have to be selective and move customers in and out after 3 years as necessary. We know customers like being in CPTT but when they no longer fit the wealthy/complex criteria we have to move them out. |
| ML – a huge percentage of CPR customers are not represented – do CPTT see these as risky? | SM – No we would not consider someone not represented as more risky than someone who was represented and vice versa. Customers are brought into CPTT because of their complexity and wealth. |
| AM – Do CPTT see any particular firm of Accountants as more risky
than another?
|
SM - In deed not, whilst a number of our customers may be represented by the same accountants we do not select cases based on who represents them. |
| TK – Is there a set time period from when a return is captured to when it is taken up for enquiry, in particular TK has examples where repayments held back for sometime before releasing them or taking up an enquiry. | SM - There is no set time frame and cases can and will be taken up within
the enquiry window. However, where a repayment rises following capture
and we stop that repayment being issued automatically, we have 10 days
to decide whether we want to take up an enquiry.
We would be very interested to know which cases, if any delays were
occurring. |
| JF – Does the offshore amnesty apply to CPTT cases and will they all become CPTT cases? | This is not an amnesty but CPTT cases are included in the ODF. Just because a customer has an overseas account does not mean that they will be dealt with by CPTT that will depend on income levels and complexity. |
| JB – What results would be published in respect of the various programmes? | That is a matter for HMRC; CPTT is not in the lead on the ODF. |
| BF – What type of third party information do CPTT use and would this trigger an enquiry? | SM – Bank Interest, property income and lettings, fraud hotline,
purchase and sale of properties, sponsorship deals, Media/ Press coverage,
sales of shares. Third party information may not lead to an enquiry but it could trigger low level intervention. |
| AM – What would CPTT like to see in white space that would prevent the need for an enquiry? | That will depend on the type of entry on the return. White space notes do help us understand entries better and we want to explore ways of sharing risk which might help customers to get it right but no guarantee that an enquiry would be avoided. |
| NG – The 0708 return asks for CG valuations - does this mean there is less chance of an enquiry to obtain this information. | BM – Yes HMRC is committed to make things easier for the customer. |
BM explained this had been included on the Agenda because a member of the group had raised HMRC’s opening letters as a cause of concern. They had seen evidence of confrontational letters being issued. BM had discussed this with the member concerned and had looked at one case in particular which, thankfully was not issued by CPTT.
BM reminded everyone that the process was as follows:
There are deviations to this where we issue a Protective enquiry or in the case of marketed Avoidance Schemes where SCI issue the letter on our behalf.
JB confirmed he had seen some accusatory letters and whilst they were not from CPTT letters he was sure they existed. He added clients automatically assume that there is something wrong with their tax affairs and that the agent is responsible. BM added he had found inconsistency across teams which he would be addressing in his new role following the transformation of CPTT as Assistant Director Professional Standards.
SM added that if HMRC does pursue the route of “low level” enquiries we will most likely write and tell the customer what it is we are looking at for example bank interest xxx not shown on your return. JB added that it would be helpful in these cases if we would write to the Agents.
ED added that if HMRC were able to release information it holds this should be done in the opening letter.
AM added that in his experience HMRC asks for documentation before asking questions that show documentation actually required.
SM concluded by saying HMRC understands that the majority of its customers want to get their tax right and that it needs to build up trust with its customers. It wants to reduce the time involved in undertaking an enquiry and if asking for documentation in an opening letter will do that then this is something it needs to consider, but not necessarily in all cases.
SC advised he was representing Keith Moore and was here to give an overview of the Donor Rules covered by FA 2006.
The 2006 substantial donor legislation (Sections 506A, 506B and 506C of ICTA 1988) imposes restrictions on transactions between a charity and its larger donors to make it more difficult for charities under the control of a donor to be used for avoidance purposes.
Not all donor charities are abusive and there are many examples of perfectly legitimate donor controlled charities, where the motive is altruistic and the donor feels they have skills that can add to the effectiveness of the charitable activities.
Nevertheless the generous tax relief for charities and their donors mean, unfortunately that charity relief can be attractive to those who would seek to abuse the tax system. When charities can be directed by donors particular problems arise. The substantial donor legislation is intended to disincentivise arrangements that the charitable sector itself should find objectionable in order to protect and maintain the generous tax relief on which the sector depends.
The substantial donor rules impose restrictions on the tax exemption available to a charity where there are “value extracting” transactions between a charity and its largest donors – those who donate £25,000 or more to a charity a year or more than £100,000 in a period of six years.
The legislation does not apply to:
The new rules do not catch benefits given to a donor in consequence of a donation to a charity so far as they are within permitted Gift Aid limits and do not catch disposals at less than market value by a substantial donor to a charity that are relieved by section 587B ICTA 1988 or 257 TCGA.
It is important to note that the substantial donor rules apply in respect of transactions with persons connected to the donor.
There are however a number of issues causing concern:
Because of this the legislation is being kept under review to allow for representation from the charitable sector.
SMac advised that the legislation catches a lot of people unnecessarily and raised a number of issues she felt members should be aware of:
Action point 2. SG agreed that HMRC would provide an update at the next Forum meeting.
At the last meeting KW talked about the restructuring of CPTT from 13 teams to 3 groups. JB had asked for named contacts should members have the need to refer to them about particular customers. CE provided a list (see attached) of the Compliance Group Leader and Service Group Leader for each groups in addition to the Compliance and Service Manger on each site.
She had also included her contact details and those of the CPTT Complaints Manager.
These names would be available on HMRC website once the restructure of CPTT is complete.
JB had raised an agenda item in relation to contacting CPTT via email where members were unable to reach the case-owners by phone.
CE advised that HMRC were currently reviewing its strategy on external email and until this has been resolved a GSI account cannot be set up for teams or Officers. CE added that “Shared Workspace” was also being considered.
AG asked members whether they felt the”Introductory Letters” issued by CPTT when bringing a new customer into one of its teams was adequate. She explained she had recently visited East Hants and Wight CPR team and seen evidence of Agents writing to the East Hants and Wight Office instead of the CPR team. This caused delays in the letters being sent to the team. She added it was not a criticism of Agents but was not very helpful to the teams. AM advised he would need to ask members and report back. ML also promised to provide feedback. CE explained the problems where post was incorrectly addressed. She also added that should they need to contact CPTT urgently and cannot get hold of us by phone – fax is probably a good communication channel.
CE asked whether members had any ideas on future Agenda topics and if so to let her know by email.
CE suggested one of CPTT Lead technicians attend to give an overview of their role. Members agreed this would be useful. CE also asked whether members would benefit from the Deputy Director Service attending to give a presentation on how the Carter changes and Modernising PAYE Processes for Customers (MPPC) would affect CPTT.
Action point 3. Members to confirm whether this would be useful and also to let CPTT know what other Agenda items they would like to include.
AM asked whether members could have copies of any “agreements” being used by the Expatriate teams. SM advised she would look at this for the next meeting.
Action point 4. SM to provide details of any agreements used by those representing Expatriates.
CE advised the provisional date for the next meeting is as follows:
On: Thursday 21 February 2008
In: Euston Tower
At: 10.30 till 1.00pm.
