Case Study: Adam Johnson – HMRC Tax Investigation and settlement of £0.5m

The core purpose of HMRC is to ensure that individuals and businesses pay the correct amount of tax to the UK government. The level of scrutiny from HM Revenue and Customs (HMRC) is constantly increased to guard against those who fail to comply with tax regulations. Failure to comply can lead to investigation, significant fines and penalties, as well as a range of other legal action(s) both civil and criminal. In this post, we will focus on the recent case of Adam Johnson Promotions Limited.

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Importance of settling tax bills with HMRC

It is essential to settle tax bills with HMRC to avoid potential penalties and legal action. Failure to pay the correct amount of tax can result in significant fines and penalties, including interest charges and potential legal action. Furthermore, non-compliance can damage an individual or company’s reputation and make it challenging to do business in the future.

Case study: Adam Johnson Promotions Limited settling a £0.5m bill with HMRC

Adam Johnson Promotions Limited is a UK-based company that provides sports marketing services to its clients i.e., the footballer Adam Johnson, who was sent to jail with a sentence of 6 years in 2016. His company recently settled a pounds half-million bill with HMRC related to unpaid taxes.

Adam Johnson Promotions Limited’s case with HMRC began in 2018 when HMRC opened an investigation into the company’s tax affairs. The investigation revealed that the company had underpaid taxes and owed HMRC a significant amount of money. HMRC issued tax assessment(s) to Adam Johnson Promotions Limited, which the company disputed.

The directors sought professional advice from an accountant and a lawyer to assist them with the negotiations. The accountant helped to prepare the company’s financial statements and demonstrated to HMRC that the company had the ability to pay the outstanding tax bills over a more extended period. The lawyer helped to negotiate with HMRC and presented the company’s case to the court. They argued that the company had a good track record of paying its taxes and had faced financial difficulties due to unforeseen circumstances.

However, after prolonged negotiations, Adam Johnson Promotions Limited agreed to settle the tax bill with HMRC. The settlement was reached in early 2021, and the company paid half a million pounds to HMRC to settle the dispute.

This case study illustrates the importance of prompt action and cooperation when dealing with HMRC. Failure to comply with tax regulations and settle tax bills promptly can lead to prolonged disputes and legal action, which can be costly and damaging to a business’s reputation.

How to settle a tax bill with HMRC

If you receive a tax bill from HMRC, it is essential to take prompt action to avoid potential penalties and legal action. The following steps can help you settle a tax bill with HMRC effectively:

Step 1: Review the Tax Bill

When you receive a tax bill from HMRC, review it carefully to ensure that it is accurate. If you believe there is an error, contact HMRC promptly to rectify the issue. Ignoring the bill or disputing it without proper grounds can lead to additional penalties and legal action.

Step 2: Contact HMRC

If you agree with the tax bill, contact HMRC promptly to arrange payment. HMRC offers various payment options, including online payments, bank transfers, and direct debit. It is essential to pay the tax bill promptly to avoid additional interest charges and potential legal action.

Step 3: Negotiate with HMRC

If you are unable to pay the full tax bill promptly, you may be able to negotiate a payment plan with HMRC. HMRC offers various payment plans, including instalment plans and TTP time-to-pay arrangements, to help taxpayers who are unable to pay their tax bills promptly. It is important to contact HMRC as soon as possible to arrange a payment plan and avoid additional interest charges and penalties.

Step 4: Seek Professional Advice

If you are unable to pay the tax bill or are disputing it, it may be advisable to seek professional advice from a tax advisor or accountant. A tax advisor or accountant can help you navigate the complex tax regulations and negotiate with HMRC on your behalf.

Expert Tax Investigation lawyers

If you need HMRC Tax Investigation advice, we are available to aid you at every stage of the HMRC investigation process. Members of our legal team have first-hand experience and knowledge of the internal workings of HMRC. We can provide you with the very best representation in negotiations with HMRC and defending all forms of HMRC fraud, tax inquiry, tax fraud investigation, criminal tax evasion and HMRC enquiries and investigations. Our team specialises in successfully challenging HMRC decisions and will assist you in every aspect of the investigation.

Our specialist Tax Solicitors and Barristers deliver expert technical knowledge, strong negotiation skills and respected advice, which can make a pronounced difference to eventual tax penalties, charges and liability.

We provide urgent advice and representation to clients from our unique expert team of established Tax and Duties specialist solicitors and barristers with a proven track record of delivering authoritative results. Just call us on 0207 1830 529, or email [email protected].