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TEAP007, Tax Preparer
Category: UK Tax
Satisfied Customers: 760
Experience:  Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
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I have been informed HMRC are checking a tax return, in particular

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I have been informed HMRC are checking a tax return, in particular to a QROPS pension transfer i did in 2009 / 10 tax year as I was planning to emmigrate, this involved an agent transferring 2 pension amounts to a non EU country, which I was led to beleive was all above board, it appears that the company involved were on the QROPS list and according to some advice already sort I am discharged of any laibility. I am actually flying out this April to Oz permanantly, but am worried as to what to do.... The check is saying they want information to assist there check, like company names dates etc... the company liquidated the funds, not huge amounts total of around 34k, and took a fee and wired the rest to me. As I say I was led to beleive this was all ok and above board, but I am worried HMRC will think differently, can you suggest a course of actions? The deadline for assisting them with the info is the end of Feb, I fly April.
1. If I ignore it and return the form stating gone away, will they put it on hold?
2. if I comply will I risk them nailing me before i fly and for how much?
3. I still have not sold the home so can they pursue money form that?

TEAP007 :

Hi there unfortunately it is not possible in a forum such as this to give a definitive as firstly we cannot review the paperwork

TEAP007 :

please come online so that we can communicate and take this thru

TEAP007 :

however it is unfortunately perfectly in order for HMRC to issue an enquiry notice for 2009-10 at this time (i.e. before 31-01-2012)

TEAP007 :

The question is going to be whether what was done was correct or if you received incorrect advice

TEAP007 :

Clearly if you took advice and followed that advice to the letter then if you were advised incorrectly your adviser would bear some responsibility for any damage or costs that were incurred DUE TO THEIR/HIS/Her NEGLIGENCE

TEAP007 :

So what is likely to happen?

TEAP007 :

well when you have not replied by end of February HMRC would be liable to formalise their request so that if you failed to comply (assuming their requests were reasonable) you would become liable to penalties

TEAP007 :

In UK there is nothing to stop anybody departing our UK shores without paying their proper dues however can I just say that where there are assets remaining in the uK it is a dangerous game to play

TEAP007 :

I have actually in the past have had clients who have come to me because HMRC were chasing them for tax and had tracked them down to Australia

TEAP007 :

Clearly if you refuse to comply with their requests (assuming again that they are reasonable requests made in proper time) then HMRC may well think that if things are not correct you knew this and decided not to cooperate

TEAP007 :

If I was in your position I would urgently contact the person/people etc who advised you in relation to the matters and advise them that HMRC have raised an enquiry into the matter and ask them to confirm that everything was properly executed and that there are no additional taxes/duties etc payable by you under any circumstances

TEAP007 :

If appropriate they may well in fact decide to deal with the matter on your behalf to ensure that there are no technical slip ups that you were not aware of. Equally armed with their response you can then decide to either fully comply with HMRC right away - also forwarding the response from the advisers - or to initially put the advisers on notice that if they have advised incorrectly then you will be considering seeking recovery/compensation or damages from them for any neglgigence in their advice

TEAP007 :

I am afraid that I do not have a crystal ball so cannot say what would happen as regards XXXXX XXXXX being put on hold etc but is this really a line you want to go down and having to lose sleep over it in times ahead when you are starting anew down under.

TEAP007 :

Yes clearly HMRC could (if they could establish an unappealable debt ) seek recovery from you from any assets left here in the UK

TEAP007 :

If you had been going to any EU country then there are recipricol arrangements where one country's tax department will collect debts in relation to another EU member and although this does not often happen it is feasible that HMRC could engage an agent in Oz to seek recovery from you after you are out there as long as they can serve the appropriate debt documents

Ok you have not come online to enter into the chat so I have converted it to Q&A. If there are any issues arising from my answer please get back to me and I will answer them when I am next on the forum.


Customer: replied 5 years ago.
Thanks Bill, apologies for not coming back on, kids were calling me...

I will try and contact the compnay, I have already and got no response so if i write a letter and email & fax it to them and keep the records showing this it may help my case?

The issue I have is I will be a non resident as of the end of April, so if I do nothing can HMRC pursue a non resident, I am led to beleive only a UK debt is enforcable in the UK and not enforcable in Oz.

This sounds really bad, I have been a honest hardworking tax payer all my life and always done the right thing, never had any debt problems. I now feel like HMRC will hit me with a penalty of upto 55% of the total value transferred if i co-operate compared to if I do nothing.

My real concern is would HMRC goto the trouble of pursuing me for the amount involved 55% of 34k.. 18k a non resident? also the home that has not sold yet, would that be touchable if I am non resident?

The letter they sent me is in the format of a check, it asks if i can help them by letting them have some information and documents as listed. I am guessing if it is ignored they will send a formal request, but not sure of the whole process and how long it takes?
These are:

What individuals and or companies did I deal with when arranging the transfer.
I have tried to contact them and they have not responded.

Please forward copies of all correspondence
All done via email and deleted arghh

Why I transferred my rights
To move the money out of the UK as I am emmigrating

Please state the value of both funds transferred
34k ish

Please provide details of any payments received from the scheme after the transfer was made
Surely this is irrelevent as it was an asset outside of the UK at the time of transfer to me? I.e. If someone sends me electronically 50k from Thailand, there is no UK tax due?

Please explain for any such payments why they were not reported these on my return.
I phoned the helpline when i received my return request (first ever in my life I would like to point out) and they advised as I had not received it directly it should not be declared or it would automatically be deemed as taxable income.

First off Do HMRC know any of this information? or are they just acting on a notice that a transfer has taken place, so in effect if they are not given this info they have nothing to go on?

My driving point here is if i argue, the process will surely take me past the end of April? at which point I will be a non resident, will they & can they pursue me as a non resident? They do not know im leaving yet, but once I file my form80? they will... so I can do this after I have left?

I appreciate you cannot answer the will they but is it probable...

All this is a whole mess and I wish i could get hold of the company... really depressing and I am at my wits end now...I have never felt like this in my entire life...
Really appreciate your help Bill

Firstly considering the "out of the country" plea I am afraid that it will not wash IF (and of course it is a BIG IF) HMRC trace you and you have no assets in the UK. I am afraid that without a crystal ball I cannot say if they would pursue. EU debts are pursued for less than £10,000 but of course it is easier to get that sort of debt within the EU. All I can say is that it is feasible that they could seek to recover the debt IF it existed. Do we know if there will be a debt?


Of course if you had an asset left in the UK then of course any established debt could be attached to that asset or you could be threatened with legal action against your UK asset/property.


I might be tempted to answer them with details of the person(s) involved and say that all transactions were undertaken based on their advice and you suggest that HMRC contact them as you have so far been unable to get a response yourself.


I am afraid that I am not an expert in Pension funds but my unresearched gut feeling would be that if you received benefits from a pension fund by means of arrangements whereby they would be taxable in the UK if your realised them before the pension conditions were satisfied HMRC would be looking to tax them if you received them by a circuitous route and arrangements while you were in and resident in the UK.


As regards XXXXX XXXXX to the helpline are you saying that somebody said don't return it or you will pay tax on it and you decided to omit it knowing that tax was due on it? Do you have a transcript of such advice and the name, date and time of the call?


As regards XXXXX XXXXX I don't imagine it would be very difficult to establish who you had the pension with if they know that there was a transfer. Of course if you adopted what was a marketed avoidance scheme then there would have been a requirement for the scheme providers (if they were resident in the UK) to advise HMRC of what had taken place and by whom. Whether of course they would cooperate with HMRC in dealing with the matter further is another question.


It could be that the information available to HMRC was what inspired them to send you a tax return to complete to see if you would return the income as taxable.


Watch about your stance "if they have nothing to go on" - clearly if they know that there has been a transfer and you have omitted it from your tax return they could make what is termed a jeopardy assessment (if they think that there is a chance you are going to do a runner - your response that transfer was made in anticipation of emigration) and assess what they consider is the correct tax liability. So you see that you could get into a worse situation if they didn't know the amount and guessed /estimated that it was more than the £50K that came to you.

Presumably you could "assist" HMRC by pointing them to the website of the people that gave you the guidance and transactions (although they may already know).


I can only say it is possible as I had a couple of clients that came to me for help after they had been in Oz a couple of years and HMRC were making matters difficult having tracked them down and raised assessments on them. It depends if you are brazen enough to think that you could get off without paying your dues.


I assume that you are talking about your form P85 being filed to claim back any taxes and to establish your intention to emigrate permanently or indefinitely from the UK. I could not recommend any such action but of course there is no taxes clearance needed to leave the UK - why not I ask myself?


You might also look at the following site to see if potentially your transfer would be ok although remember there is nothing better then a suitably qualified tax adviser reviewing all paperwork and documents and facts. Unfortunately that cannot take place on a forum such as this which can only provide generic observations based on the information provided.


As you will see the Q&A on the website highlighted suggests that it could still be ok if you were leaving the UK within 12 months..... potentially you could fall foul of this then given that you presumably got your transfer in 2009 or 2010?


HMRC Reporting

Ever since 2006, the reporting QROPS rules have required QROPS providers to notify HMRC when the first benefit payments are paid to the member, but only if the member is resident or recently resident (5 years or less) in the UK. So clearly HMRC may well have been advised of the details of the benefits transferred.

Customer: replied 5 years ago.
Thanks Again Bill

I appreciate your efforts, I am inclined to wait closer to the date mentioned in your letter and respond with the line of suggesting to contact them for details as they were my agent in effect and dealt with all the paperwork, I merely signed it and returned it, again based on their advice. This surely will see me past my date of leaving the country.
This coupled with a P85, surely will indicate that I am not coming back and non resident?

Why do you not recommend a P85? I have no intention of returning to the UK at all.

Thanks again... all this stress.. i can see how people get depressed and do silly things... I am trying to stay calm, at the end of the day worse case scenario I have to pay potentially 55% of the figure back?
if so do you know if they would want it back in one go in a matter of days or do they appreciate peoples circumstances and allow tme and installments... on that note worse case scenario they say I have to pay an amount (not sure how much, any ideas? I have seen this 55% banded around) If asked for it with 7 days and I cannot pay it in 7 days, will they send the police after me even if i am trying to sort it out?

One more point on the P85, I understand that if you file a P85 you are entitled to a rebate based on your annual tax, so in theory if I filled a P85 in April, I would get a rebate based on the whole Tax year? so that in effect could be several thousand pounds off my QROPS bill?

Thanks again Bill

No sorry don't mean to add to your stress but if you file a P85 in April (i.e. you are leaving in April it is unlikely that you will get a lot back as each tax year is separate and one would start on 6th April so that at the most all you might get back would be April's tax if that was any.


Don't worry about the police it is a civil matter not criminal!!!


You could end up with the 40% recovery tax plus the 15% extraction levy = 55% but then you could also have interest to pay on the tax unpaid. Unlikely to get a penalty in addition as clearly unless you knew (or suspected) that the information being provided was incorrect you would be unlikely to be negligent to merit a negligence penalty. Negligence penalties are normally tax geared at FROM 100% of the tax downwards depending on how HMRC can suggest your actions were negligent, careless or intentional and can either merit total deferral (if you can show that you took reasonable care) or nil through to normally 20%-30% in your type of case where there was negligence.#



Customer: replied 5 years ago.
Ok Thanks Bill, will not worry about the police kicking my door down...Thats a big relief..
so unless I leave in March no point other than them being notified I am leaving and not coming back... If I did leave in March then I would be entitled to a rebate of the whole year of my tax paid? this might be worth doing as it would be a few thousands possibly?

As I said I will try the line i have suggested, as indicated then as they were my Agent and I can prove i have tried to do things above board i would be looking at the 55% plus interest on 34k..? out of curiosity whats the interest rate in these circumstance? What is Total deferral?

Just to jump back a bit, I did phone the helpline and yes the pensions advisor suggested not to put the transfers down on my standard tax return as the system is so big it would have been included and taxed without anyone looking at it... Crazy...

Thanks Again..

Unfortunately I feel like the prophet of doom.

If you leave in March the most that you would get back (assuming that you were an employee getting paid monthly and having tax deducted in each month and also assuming that the last pay you got was for February ) would be 4 weeks/1month of allowances that had not been used (say £7475 the personal allowance for the year divided by 12) say £623 @ 20% =£124.60 if basic rate taxpayer and £623 @ 40% if higher rate taxpayer.


Interest rate is about 3%


Deferral means they sort of put you on "probation" and if you don't do anything wrong for a couple of years they don't charge the penalty


I don't suppose you have a recording of that conversation -


Forgot to mention - you can't get blood out of a stone so if you/adviser have to negotiate terms for repaying the money - assuming that you haven't saved it or have the ability to get a loan - then you would also have to pay further interest for any terms

Customer: replied 5 years ago.
Thanks again Bill not the prophet of doom lol... you have actually had a positive effect :-)

I will wrap this up.. I dont understand the P85 issue, if I submit one in April i get practically nothing and if I submit in March I get have people managed these healthy rebates when submitting the P85 then? just thought it might assist me in my bill that may come my way...

On the informing them in responding to the request they have sent me, do you suggest just writing a letter as to the company and what I have attempted to do in terms of contacting them?

Many Thanks

I cannot advise you to not provide HMRC with any information that is available to you but you could say that you do not have any documents and that the whole matter was done on the advice of and in the exact manner that you were advised to do it by the specialists --- and give name of company etc with website if held. You could suggest that HMRC seeks the information and documents from them as you have tried to get the relevant documents without success and that provision of the necessary documents is not within your power or possession.


Mind you they are liable to come back and say that you can provide the information as opposed to documents BUT you never know

Customer: replied 5 years ago.
Thanks Bill
I dont understand the P85 issue, if I submit one in April i get practically nothing and if I submit in March I get have people managed these healthy rebates when submitting the P85 then? just thought it might assist me in my bill that may come my way...
Customer: replied 5 years ago.
Morning Bill

Still wrangling with this one..
a quick one...

If HMRC have not actually started an official enquiry, and have had no response from me can they start or even continue an enquiry without knowing where I am?

2 options -
1. I do not respond and return the orginal letter Gone away.
2. I respond and as suggested ask them to seek the information from the company that did the job and add that i am no longer in my existing address (property sold) and have no fixed abode?

Technically once the house goes through I will have no fixed abode and will then be leaving the country, bearing in mind the amounts were talking about is it likely they could freeze my passport and bank accounts in 8 weeks?

Appreciate your help again...

You said that you had been advised that they were checking a tax return therefore there is an enquiry going on.


I cannot advise you to do inappropriate things like sending letter back as gone away or giving false information that property sold if it has not been. HMRC would potentially check with the Post Office about new address etc.


I would also suggest that the time has come for you to press the accept button. I have no problems in answering any issues arising directly from my answer but I think that very soon you might be gone from here as well. Of course I know where you are going. LOL.



TEAP007 and other UK Tax Specialists are ready to help you
Customer: replied 5 years ago.
Apologies Bill thought you had already closed it out...
I was not looking for what to do, more of a what HMRC might do.... The property is close to completion now, hence the question if I technically don't have any assets.. and about to leave...
Thanks again...