Ok this is probably fairly normal in the life of being a high flying tax adviser in the UK .

Busy reviewing a substantial S.574 tax loss claim of share capital against income and some rather odd arguments from an Officer of Revenue & Customs (ORC), formally Inspector of Taxes, for disallowing the relief which I have not heard before. Since dealing with this ORC before on a different case she has taken to adding LLB after her name. This may be why her arguments get more strange. She is a Legally Liable Bod so this is clearly a warning to me that she is of course going to be right with her arguments. Highly trained and skilled in her profession. I can't find my wig so I think to myself "you'll just have to do your best John it's going to be tough ..." Her legal argument is highly skilled and reasoned... "in my opinion the subscription for new shares in 2003 and 2004 were to replace an already irrecoverable or worthless loan"... therefore I am proposing to disallow the claim and inviting me to justify the S574 claim if I don't agree. There I am left sitting just racking my brain as to how she came to this opinion as the balance sheet of the company is not negative at the time the directors loan account was converted into newly issued shares?.... then the phone rings

"Hi John, the taxman has just changed my coding notice again (PAYE code) and included a random £10,000 of benefits in kind when all I get is business expenses so I going to be paying around 49% tax again on my salary with this ***** "K code".... I thought we had sorted this and got it removed a month or so back.."

"Yep we did get the code adjusted to remove the £10,000 business expenses a couple of months ago" I replied.

"Well you never guessed it..." the client replies and I think to myself oh yes I can ... "The taxman has changed it back again..."

"Oh now there's a suprise" I reply. "And they tell me it is because they have a letter from YOUR firm in the last seven days telling them to change it back..."

There follows a 10 minute discussion where I try  to explain to the client this is extremely unlikely as the P11Ds were done months ago, his 2007 tax return has not gone in yet and "why would I write to HMRC to tell them to change it back again..."  Yet again I am left stratching my head, no wonder I am going bald in this job...

 "They are adament that you have written to them..." says the client.

"Fax me the coding notices and I will call HMRC to get to the bottom of the story and sort the issue out" I reply...

 "Will do" says the client...

As you can see this is an important part of being a tax adviser highly technical and worth the years of training. After 20 years in practice I am now at full stretch...

Ten minutes later... "John, just spoken to the taxman again and he says it's just a computer error and will change it back again".

"Really... blyme a computer error eh..., that's odd.." I say... trying to sound amazed and suprised.

"Why odd?" says the client..

"I thought computers usually did what their masters told them to do" I reply. "Obviously HMRC's computer has a mind of it's own...".

Refreshed and relieved from the the 15 minute comedy break it's back to S.574 and an ORC that's seems to like making things up as they go along or that is how it feels from past experience with this particular ORC... 

Perhaps if I am lucky the reply to my letter to HMRC re S574 losses will read something along the lines of "Opps, my apologies there was a misprint in my copy of the legislation...". Sadly I doubt it.... This is no doubt just round one in my experience...

She was very polite though I must give credit for that. She could have simply written... "In MY opinion you cannot have this relief or the tax refund due so stick it. If you want to appeal you have the right to appeal to the General Commissioners".   Could go the full ten rounds this one me thinks.. well that is if she can give me any statutory reference, tax cases or HMRC practice statements to support her suggestion as I have requested. Or will she simply dish out a revised liability statement (not uncommon with HMRC) for the tax year and say "Go the General Commissioners if you don't like MY opinion" after all...