Not for the first time in my professional career, Her Majesty’s Revenue and Customs appear, in my humble view, to have failed the trust test. I do not wish to make any false accusations, so I will use words such as “may” and “appear”, and will leave it to the reader to consider the evidence. The irony though, is that HMRC is an organ of government, yet there seems to be evidence that it is not averse to pulling the odd fast one, however much it may bleat about nasty taxpayers who are happy to use the law to avoid tax.
Today I saw a new notice of coding for a client. This client, like most entrepreneurs, has a salary from his company and pays out excess profits, if any, by dividend. He has been doing so for some years – most years he pays a dividend. Some years he has not made enough profit to do so. Each year, he files a tax return which takes account of his employment income, other bits and pieces and his dividends. He has to make payments on account each year in accordance with the rules for self assessment. I doubt anyone will find this unusual.