A practical guide on the powers of HMRC

1. A practical guide on the powers of HMRC Presentation by: Sue Bradshaw Date: 3 September 2009 The Paper Trail

2. Sue BradshawBTG-Tax • Former Senior Tax Investigator in HMRC – 25 years • Headed HMRC Specialist Investigations Civil Fraud Investigators in London • Board of HMRC National Offshore Project team • 7 years in private practice assisting individuals and companies with taxation matters Tel no: +_44 (0) 207 024 8374 Mobile: +_44 (0) 7765 095459 E-mail: sue.bradshaw@btg-tax.com

3. Sue BradshawBTG-Tax • HMRC information powers – new rules • HMRC penalties – new rules • Risk assessment etc. • UK compliance activity in the offshore arena • New Disclosure Opportunity and Liechtenstein Disclosure Facility

4. Sue BradshawBTG-Tax New Powers and Penalties • Overhaul of HMRC Powers and Penalties • Brings together Inland Revenue and Customs • Behaviour based legislation • Information and Inspection powers

5. Sue BradshawBTG-Tax New Powers – From 1 April 2009 HMRC have new powers to: • gather information and examine documents • Inspect business premises and business assets and business documents on those premises • check records before filing But • Info/docs must reasonably be required to check a person’s tax position • Still some restrictions for some types of highly confidential information • Safeguards to ensure HMRC act reasonably

6. Sue BradshawBTG-Tax New Penalties- from 1 April 2009 • Return periods on/after 1 April 2008 and due to be filed on/after 1 April 2009 • Submission of incorrect document • All taxes • Now applies to Understatements and Inflated losses • No penalty for mistake • Fixed band penalties related to behaviour

7. Ranges of Penalties (Sch 24 Para10 FA 2007) 100% Max 100% Min 50% (with PD) Min 30% (with UPD) Max 70% Min 35% (with PD) Min 20% (with UPD) Max 30% Min 15% (with PD) Min 0% (with UPD) 0% Failure to take Deliberate Deliberate Mistake understatement with reasonable care understatement concealment UPD = Unprompted disclosurePD = Prompted disclosure Sue BradshawBTG-Tax

8. Paying the penalty – HMRC new approach to compliance ‘Old’ Penalty Regime v New Regime Sue BradshawBTG-Tax

9. Sue BradshawBTG-Tax HMRC’s Compliance Activity – New procedures • Disclosure of Tax Avoidance Schemes • Litigation and Settlement Strategy • Risk Assessment for Large Corporates • Personal Tax Accountability of Senior Accounting Officer • Publishing the names of deliberate tax defaulters

10. Sue BradshawBTG-Tax HMRC’s Compliance Activity - Offshore • ‘Amnesty’ - 2007 Offshore Disclosure Facility • Offshore Bank Data - information notices to 308 banks – very recently • ‘Amnesty’- New disclosure opportunity – 1 September 2009 to 12 March 2010 - Liechtenstein Disclosure Facility – 1 September 2009 to 31 March 2010 • Cross Border Cooperation – G20, various Exchange agreements- Bermuda - Jersey - Anguilla - Isle of Man - Guernsey - Turks and Caicos - Gibraltar - BVI - Liechtenstein

11. Sue BradshawBTG Tax Summary New powers and penalties • Document retention • Guidance/plan for Inspections • Manage information/inspection notices • Voluntary disclosure will reduce penalties Risk assessment/SAO certificate • Ensure systems and processes are robust Overseas accounts/companies/assets • properly managed and disclosed • Use NDO/LDF if appropriate to gain beneficial settlement

12. Sue BradshawBTG-Tax Questions.