Sian Marsden explains how HMRC utilises a wide range of sources to gauge whether the right amount of tax has been paid.
HMRC receives lots of information from a wide range of sources to check whether the tax returns submitted by taxpayers are correct. A recent First-tier Tribunal (FTT) case concerning a property investment partnership operated by the taxpayers Mr Davies and Ms Mahil highlighted that HMRC also uses publicly available information to support its compliance activities.
HMRC relied upon details that Mr Davies had included in several books he had written including ‘Retire on One Property Deal’ and ‘Escape the Rat Race with Property Lease Options’, and articles featuring quotes by him. These publications claimed net profits of £50,000 and £91,000 on two properties, stated that the couple’s five biggest properties were earning profits of £145,000 and claimed that the couple had four holidays abroad totalling six weeks.
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