This case shows how we go above and beyond for our clients helping a married couple, of which the husband had a severe mental disorder, to correct their tax liabilities.

A difficult situation exacerbated by ill health

Husband and wife Ben and Sarah* were already in the initial stages of an HMRC local compliance investigation in respect of their investment property portfolio when Sarah approached us. She was looking for advice as Ben had always managed and controlled the portfolio until in recent years when he’d developed Alzheimer’s disease.

Sarah, herself suffering from a heart defect, confirmed that there were historical undeclared rental income and capital gain irregularities because of deliberate behaviour on the part of them both. However, as she began to take control of financial responsibilities, the tax irregularities she uncovered were worse than she had thought and so Sarah had been attempting to regulate matters on a going forward basis.

Protecting all parties

While Sarah wished to make a disclosure to HMRC, Ben’s mental capacity was such that she feared he could not instruct us. We arranged for Ben’s mental capacity to be assessed by leading medical experts and it was determined that he indeed could not. As a result, we introduced Sarah to a specialist solicitor so that an application could be made on Ben’s behalf to appoint a deputy to represent his interests. This also ensured that Sarah was protected from accusations of acting against her husband’s will.

Given their behaviour was deliberate in this case, we voluntarily applied for Code of Practice 9 (COP9). While we couldn’t be appointed by Ben, our application was carefully prepared to explain the special circumstances and protect his position, as well as Sarah’s.

No criminal repercussions

HMRC Fraud Investigation Service (FIS) assumed responsibility for the case and confirmed acceptance of Sarah’s COP9 application, meaning she could make a full disclosure without fear of criminal repercussions. HMRC FIS also confirmed they would look to establish Ben’s exposure and confirm his liability through the civil process and would not be considering a criminal tax investigation.

Despite the challenges in this case, HMRC FIS accepted the report for both Ben and Sarah in its entirety, no deliberate penalties were charged to Ben and Sarah’s deliberate penalties were kept to a minimum with maximum reduction being awarded for quality of disclosure.

When presented with a situation like this, our aim is to primarily act ethically and ensure everyone’s best interests are looked after. While it might have been easier to wait for when Ben was having a ‘good day’ to sign the authorities and thereafter just deal with Sarah, Ben’s medical assessment ensured that we did the right thing for both of them. The values we identify with, the consistency of our advice and our ability to tailor-make solutions means Buzzacott can be trusted to do the right thing. For you and your family.

*Clients names changed to protect their confidentiality