On a related issue, two years ago we received a rather peremptory letter from HMRC stating that 'they had received information that we had sold a property without declaring the Capital Gains....and that HMRC would institute recovery of said CGT' or words to that effect. We sold the house - our first house - in 2004. The CGT they were hoping to recover would have topped GBP40K.
The letter then included a long list of questions we 'were required to answer' to avoid the matter going to Court. A quick check with the Accountant confirmed that the HMRC were 'fishing', and that I should not answer these questions without first being cautioned. I rang the investigator, who was clearly working from home (kids having tea in the background) and pointed out that the house in question was our principal private residence that we would have lived in, but for the 'exingencies of the Service'. I also pointed out that I had a letter from HMRC confirming that it was our PPR, and that over the 10 years we had owned the property (and let it for most of that time) we had submitted annual audited tax returns.
The invesitgator claimed he wasn't aware of the background. I forwarded a copy of the PPR letter from HMIR (as was) by recorded post and a week or two later I received the gritted-teeth response of to teh effect of 'we will not proceed with prosecution at this time...'.
kEY POINTS:
- KEEP DETAILED RECORDS FOR AS LONG AS POSSIBLE (ignore the 7 year rule - HMRC can dig much, much further back).
- BE HONEST AND OPEN WITH THEM (they can be very helpful if you do self-assessment).
- DON'T LOSE YOUR TEMPER...A PROVIDE LOGICAL, CLEAR AND RATIONAL ARGUMENTS.
Oh, a JPAC funny: I was recently asked for a copy of my daughter's birth certificate to prove that she exisits so that I can claim LOA for her. I stated that a certified copy, notarised by a JP, had been submitted shortly after her birth. The JPAC staff - bless 'em - said 'Who's JP?'.
Suffice to say, I was not going to part with the original and have that lost...again!