Employer-Financed Retirement Benefit Schemes (EFRBS) Settlement Opportunity

HMRC Offer EFRBS Settlement Opportunity

HMRC are giving employers the chance to settle open enquiries into the use of employer-financed retirement benefit schemes (EFRBS).

The settlement opportunity applies to contributions made by employers on or after 6 April 2006 and before 6 April 2011.

HMRC are of the belief that such arrangements do not work and therefore the settlements will avoid the need to take part in potentially costly litigation, thus benefiting both sides.

Firms will have until 31 December 2013 to enter into an agreement with HMRC.

Two Options Available

They will then be required to choose one of the following two options offered by HMRC:

i) No Corporation Tax deduction can be claimed on contributions to an EFRBS until the relevant benefits are paid out by the scheme, HMRC also expect PAYE and NICs will be due when they are paid out or

ii) A Corporation Tax deduction can be claimed when contributions are made to the EFRBS.  However, when those contributions are made they will be subject to PAYE and National Insurance contributions.

If an employer chooses to settle with HMRC by choosing one of these options they will have until 30 June 2014 to finalise the arrangement.

Interest & Penalties

Under option 1 interest will run from 9 months and 1 day from the end of the accounting period for which the additional amounts are due.

Under option 2 interest will run from 19 April following the end of the tax year in which allocations were made to the date the PAYE Income Tax and NIC is paid to HMRC.

HMRC have said that they will only seek penalties regarding any tax due in exceptional circumstances. However this is caveated by saying that every case will turn on its own facts.

Bank Settlement – Wholly and Exclusively

The recent tribunal case of Mr Vaines v HMRC (TC02965) dealt with whether a deduction from trading profits was allowed under the ‘wholly and exclusively’ principles, for an out of court settlement of a bank claim relating to a previous trade.

If the claim was not settled the taxpayer could be made bankrupt thus preventing him from continuing in his current trade.

Background

The taxpayer, Mr Vaines, was a member of Harrmann Hemmelrath LLP, a German law firm with offices in London, until 31 December 2005.

The taxpayer subsequently became a partner in Squire Sanders & Dempsey.

On 27 October 2009 the taxpayer made an amendment to his tax return for 2007/08, claiming a deduction of £215,455 against his professional income from Squire Sanders & Dempsey.

The deduction claimed was for a payment made to a German bank, under an agreement made by a number of individuals who were connected with his previous law firm, Haarmann Hemmelrath.  The firm had ceased to trade and owed approx. €17m to a number of German Banks.

The taxpayer believed that the risk of challenging the banks through the German courts was unacceptably high; as if he lost he would be made bankrupt.

If made bankrupt he would lose his current position as partner at Squire Sanders & Dempsey.

Following negotiations with the bank, he agreed to pay them €300,000 (£215,455) in full and final settlement of all claims.  This was paid in January 2008 (tax year 2007/08).

An amendment was made to his 2007/08 tax return and a deduction from his professional income from Squire Sanders & Dempsey claimed.

HMRC denied a deduction primarily on the basis that the payment was not wholly and exclusively for the purposes of his trade.

HMRC’s Arguments

HMRC argued that the deduction should not be allowed for three reasons:

  1. Mr Vaines did not carry on a profession or a trade as an individual,
  2. If he did carry on a trade individually the payment was not wholly and exclusively for the purposes of the trade as it also enabled him to avoid bankruptcy and preserve his reputation, and
  3. If it was wholly and exclusively, it was capital and not revenue expenditure and therefore no deduction was allowed

Tribunals Conclusions

1. Trading as an Individual

 HMRC had tried to rely on a case that predated self-assessment. However this case was found to be superseded by ITTOIA s.862, which states that members of an LLP are treated as carrying out the trade and not the partnership itself.

The tribunal therefore dismissed HMRC’s argument that Mr Vaines did not carry on a trade in his own right.

2. Wholly & Exclusively

The tribunal held that as a matter of fact the purpose of Mr Vaines making the payment was to preserve and protect his professional career or trade.

With this in mind the case of Morgan (Inspector of Taxes) v Tate & Lyle Ltd (1955) states that ‘money spent for the purposes of preserving the trade from destruction can properly be treated as wholly and exclusively expended for the purposes of the trade’.

As a result they found that the payment to the Bank was wholly and exclusively for the purposes of his trade.

3. Revenue or Capital?

The final consideration was whether the payment was revenue or capital.  HMRC contended it was capital and therefore no deduction was allowed.

Mr Vaines argued that no asset or enduring advantage was brought into existence by the payment made to the Bank and as a result it was a revenue expense.

He relied on Lawrence J in Southern (HM Inspector of Taxes) v Borax Consolidated Ltd (1940) where he stated;

‘..if no alteration is made in the fixed capital asset by the payment, then it is properly attributable to revenue’ and ‘it appears to me that the legal expenses which were incurred…did not create any new asset at all but were expenses which were incurred in the ordinary course of maintaining the assets of the Company, and the fact that it was maintaining the title…does not, in my opinion make it any different’

The tribunal found that as the payment was to preserve and protect his professional career or trade it must follow that it is a revenue and not capital payment in line with the case above.

Decision

As a result the appeal was allowed and the payment found to be wholly and exclusively for the purposes of his trade.

When Does VAT become Unpaid? – Taste Of Thai Ltd (TC2721)

The recent tribunal case of Taste of Thai Ltd (TC2721) dealt with a penalty for late VAT registration; specifically when the VAT became due for the purposes of calculating the penalty rate.

Background

The restaurant deregistered for VAT in 2008 as its turnover fell below the threshold.

On 17 November 2011 the business notified HMRC that it should have been re-registered for VAT from 1 March 2011.

HMRC checked the figures and found that it should have actually been re-registered for VAT from November 2010 (it had failed the historic test at 30 September 2010).

As a result a penalty for late registration was issued, with HMRC acknowledging that the failure to notify was not deliberate and the disclosure unprompted.

HMRC said that the disclosure was made more than 12 months after the tax became due. Therefore the penalty range was 10% to 30%.

HMRC levied a penalty of £966; equivalent to 10% of the tax due, so full mitigation for the quality of the disclosure was given.

The Case

The taxpayer appealed the penalty on the basis that the disclosure was made within 12 months of the tax being due.

The legislation states that a lower minimum rate of 0% will apply if HMRC ‘becomes aware of the failure less than 12 months after the time when tax first becomes unpaid by reason of the failure’.

Therefore the tribunal had to establish when the tax became unpaid.

It was agreed by both parties that the taxpayer should have re-registered for VAT from 1 November 2010.

However, HMRC felt that the tax become unpaid at this point, i.e. from when they should have charged VAT on their goods and services. Therefore as the disclosure was made on 17 November 2011 more than 12 months had passed.

Conversely the taxpayer argued that the VAT did not become unpaid until it was required to be paid over to HMRC, i.e. a month after the quarter end.

The earliest possible quarter end would have been 30 November 2010, with the tax being due on 31 December 2010.  Therefore the taxpayer argued that the disclosure was made within 12 months.

The Decision

The tribunal said ‘it would have been a very simple matter, if parliament had intended Date 1[the date tax becomes unpaid] to be…. the effective date of compulsory registration, for it to say so’.

The logic behind the wording was so that a taxpayer who is initially a repayment trader is not deprived of the opportunity of a 0% non-notification penalty until, broadly 12 months after he becomes a “repayment” trader.

‘There is a link between the 12 month period starting to run and the start of the potential loss to the public purse’.

Therefore they found ‘no reason not to take these words [of the legislation] at face value’

As a result they agreed with the taxpayer and concluded that the ‘time when the tax first becomes unpaid’ is the due date for payment of the VAT.

The earliest possible date for payment was 31 December 2010 and the disclosure was made on 17 November 2011; therefore the disclosure was made within 12 months.

The tribunal found ‘no reason to interfere with HMRC’s view that the quality of the disclosure merited 10% mitigation within the available range’.

The taxpayer’s appeal was allowed and the penalty reduced to 0% – i.e. no penalty would be due.

Rather interestingly as an aside the tribunal said that if the disclosure had been made later (i.e. January 2012), they would have required evidence of HMRC policy on the first VAT accounting period which would have been allocated.

‘Raising the Stakes on Tax Avoidance’ – A Response

For those of you who failed to find the exciting Government Consultation Document, ‘Raising the Stakes on Tax Avoidance’.  It is a fluffy, woolly document which proposes that the HMRC should have discretion to label someone as a “High Risk Tax Provider” [of Tax Avoidance] and then fine them up to £1m (plus £10,000 per day) for … well read and find out.

I am sure HMRC may mean well, but surely this is not the answer?  It is extra resources they need not new powers?

Anyway, for those now champing at the bit, here is my submission to HMRC on the Consultation.

“Please accept this as a formal response to the Consultation Document “Raising the stakes on tax avoidance.

SUMMARY

In my opinion the approach suggested is:-

a)     Wrongheaded.

b)    Risks bullying, corruption and, in the longer term, a reduction, rather than increase in tax compliance.

c)     Is an abuse of Parliamentary process, because (according to HMRC figures in Section 8 of the Document) the estimate is that there are only 20 businesses who may be affected.  Such as issue could and should be dealt with under existing powers.

d)    It risks undermining the Rule of Law, because it proposes severe sanctions (including £1m initial fine plus £10,000 per day subsequent fines) with the penalties being imposed on woolly, ill-defined criteria which are ultimately at the whim of State dictat.  This is particularly a concern because none of the alleged criteria require there to be any criminal behaviour on behalf of the so called ‘high risk promoter’.  Fines of such a size would ruin most individuals – taking their families down with them.  How can such penalties be compatible in human rights or any version of equity with recent lenient policies on penalties for theft and burglary?  Those activities are illegal.  On the other hand tax avoidance is generally thought to be legal. [Collins Dictionary 1995: tax avoidance n. reduction of tax liability by lawful methods].  How can it be appropriate to punish someone for obeying the law to a greater extent that the sanction chosen by the state for illegal attacks on an individual citizen’s property?

QUESTIONS

I           Identifying a ‘high risk promoter’.

  1. Question I incorporates a value judgement and states (in 3.16) that ‘the lack of flexibility leads to the conclusion that this would not be workable, consequently the Government does not intend to adopt this approach’.

I agree the lack of flexibility represents a problem, especially as common professional advice is (in relevant situations) to request HMRC use formal powers, so as to avoid the risk of the client suing the advisor for breach of confidentiality.  However, to then make it down to the whim of a Revenue Official whether a law abiding citizen and his/her family could be financially ruined is totally unreasonable.

  1. The ‘key individual’ concept is especially iniquitous as it could effectively lead to a person being unemployable in their field of training without having committed any crime whatsoever.
  2. Whilst the consultative document uses the currently fashionable term ‘transparent’, this does not take account of:-

a)     The risk that the client may not be truthful to the advisor, so what looks like a reasonable assumption/conclusion to him may not tie in with all the facts – especially events occurring after his input.

b)    The fact that any commentary on planning must, by definition incorporate assumption on future events.

  1. A key risk of a taxpayer using an avoidance scheme is that it does not work.  It is the role of HMRC to identify such schemes and challenge them.  If they are quickly shown to fail taxpayers will not waste money on purchasing them!  I agree they should be diligent and do this.  They need extra resources, not extra theoretical powers
  2. If (Para 3.6) the schemes have negligible chance of working and rely on ‘concealment and mis-description of elements’ then surely they are fraudulent, representing illegal tax evasion.  This is not avoidance and should be subject to separate penalties/criminal sanctions.  However, HMRC does itself no favours, nor any to the debate on tax compliance to mix up, as it seems to deliberately, lawful and unlawful behaviour.
  3. I agree that taxpayers should have the right to see the pros and cons of technical advice and if necessary, the right to show that to different advisors.  Advisors (and HMRC) should then be obliged to debate the merits of any technical issue in a reasonable timescale in full light of the facts properly disclosed.  Similarly though the client should be entitled to claim professional privilege in terms of the advice elements.

 I am conscious in this context that when asking for data under the Freedom of Information Act I was told that keeping the advice of legal counsel secret was vital to the administration of justice and good governance.  If a taxpayer is not allowed to see the advice given to public servants he has effectively paid for via taxation in the context of a ‘consultative document’, why should the State have the right to see advice given to him  specifically with regard to his own affairs, to his possible prejudice?

  1. Although penalties are proposed for doing ‘it’, tax avoidance is not even defined here.  However, readers considering the current provisions should recognise that the recent comments by Jamie Oliver promoting home made healthy food, would (under the last published HMRC definition of tax avoidance) amount to ‘tax avoidance’.  This is because he was promoting zero rated food purchases rather than take away food liable to VAT at 20%.

II          High risk promoter regime

  1. Without identifying a proper definition of High Risk Promoter and Tax Avoidance it is totally inappropriate to have a ‘regime’ at all.
  2. A better route may be to consider HMRC ‘endorsing’ professional advice by advertising those regulated by ICAEW, CIOT, ACCA etc., are subject to proper professional standards and then naming those who failed to live up to it – within the normal and limited restrictions imposed by libel and defamation.  It would only seem fair that a business so challenged should have access to those standard defences.
  3. There should be no need for extra time limits.  If the time limits are not long enough then that should be addressed generally.  HMRC needs sufficient resources generally to carry on, but that compliance effort should be targeted widely and fairly.  By all means focus sensibly on perceived targets and risk areas.  It is sensible.  However, all should be equal before the law and it is not just this week’s ‘Group Hate’ Victim.  Others may turn out to be equally naughty.

III         Penalties for Users of Failed Schemes

  1. My experience both as an advisor and Inspector of Taxes is that people do not like the risk of litigation, let alone the consequences of losing.  If a judicial decision goes against them, or their technical stance most well advised litigants will be only too willing to drop the case and ‘amend’ their returns.  I would therefore be surprised if there was evidence that taxpayers were simply ‘stringing things out’, because of the resulting high professional cost to them.
  2. It follows that the risks of failure with costs being awarded against them are already a dis-incentive to taxpayers, in which case there should be no requirement for a ‘penalty’.  This would just seem to be an arbitrary risk to be imposed by HMRC for going second, enabling them to bully taxpayers into settling where in law they may have valid distinguishing features.

CONCLUSION

I used the words ‘wrongheaded’ to describe the proposals.  In my view this is because it is seeking statutory measures to try to solve a problem of resources.  HMRC does not need more powers, it needs the personnel, resources and training to impose the powers it already has.

In the 17th Century Governments chased lawless behaviour by imposing greater and greater sentences on people without really addressing the probability of being caught.  It resulted in the saying that someone ‘might as well be hung for a sheep as a lamb’, because the sentences got so arbitrary that sheep stealing was a capital offence.  Tax compliance is a delicate flower.  It has been nurtured over time by HMRC fairness and the associated co-operation resulting from qualified professionals.  It is never going to be perfect, but generally I believe the profession wishes to continue to help by encouraging good compliance.  However, this will not happen if they are bullied out of explaining reliefs and the ‘upside’ of compliance.  That is another way of interpreting the tendency for professionals to avoid giving tax advice.

I think it unlikely there would be a change of behaviour by diligent professionals.  It will follow the financial services advice model of 20 years ago, where independent professionals will be excluded with the result that clients will go to the unscrupulous.  Reality in the commercial world being as it is, I fear clients would be likely to refuse to pay fees to learn what they are not allowed to do, without associated sensible advice on what they may do lawfully.

Whilst I still have admiration for many HMRC staff, the fact remains it has suffered and is suffering from a lack of trained staff, and people who are authorised to take decisions.  My colleague was on the phone for 1 hour this morning (without getting through) to ask why we were being threatened with penalties for ‘failing’ to file a form which has already been filed.  Currently, I have more than 1 case where we have written to HMRC to try to pay extra tax due but have been ignored or fobbed off for over a year.  Give HMRC the resources to do their job properly.  Do not impose extra arbitrary penalties and lose the sympathy of the majority.  When HMRC think it ‘reasonable’ to seek penalties for a ‘late return’ when it was actually lodged 10 days early as they did recently [Estate of Teresa Rosenbaum (deceased) 2013].  I fear they risk moving the rather fickle mood of public opinion against them.  It is an example of a bullying bureaucratic mind set which promotes a natural fear that, if not now, at some stage in the future, the arbitrary powers envisaged by the Consultative Document may be misused – to the detriment of us all as free citizens supposedly equal under the law.

I recommend the provisions are abandoned.  Use the money to train some Inspectors.

Paul Eaves”

New Daily Penalties for Late Payment Quashed

In the recent co-decision tribunal case of Morgan v HMRC and Donaldson v HMRC (TC 9096 & 8431) the procedure behind issuing £10 daily late filing penalties was challenged.

Background & Legislation

Schedule 55 of FA 2009 allows HMRC to levy penalties of £10 per day if a self-assessment tax return has not been filed within 3 months of the filing date.  Such can penalties can be issued for up to 90 days, meaning that the maximum daily penalties issued totals £900.

In order for the daily penalties to be valid the legislation requires that HMRC “decides” whether to impose the penalties and notifies the taxpayer of the decision.

The taxpayers in question argued that the SA returns and subsequent reminders issued did not satisfy the above conditions and therefore the penalties were not valid.

 The questions for the tribunal to address were:

– Did the fact that daily penalties were automatically issued by an HMRC computer constitute a decision?

– Did the SA return and/or reminders constitute a notice of the liability to the daily penalties?

Decision

The tribunal found that it had been decided at a senior level, and as a general policy, to impose daily penalties where there’s a default, and accordingly the HMRC computers were programmed to deal with this. To do otherwise would have meant up to a million individual decisions – a completely impractical exercise. The tribunal, by the chairman’s casting vote, therefore found that there had been a HMRC decision which met the requirements of schedule 55.

With regards to the notice of a penalty HMRC relied on the SA returns and reminders which stated:

 “If we still haven’t received your online tax return by 30 April (31 January if you’re filing a paper one) a £10 daily penalty will be charged every day it remains outstanding. Daily penalties can be charged for a maximum of 90 days, starting from 1 February for paper tax returns or 1 May for online tax returns.”

The tribunal found that the statutory requirement was not met as the documents were ambiguous.  This was because of the use of ‘will’ in the first sentenced followed by ‘can’ in the second.

The tribunal found that the text merely indicated that HMRC could impose daily penalties.  They felt that even applying a purposive construction the terms of either document were not clear enough to impose a penalty from a particular date.

The fact that two dates were mentioned was not the point; the vagueness of the documents was their downfall. Accordingly the appeal on the daily penalties was allowed.

Impact of The Case

Presumably HMRC will update the text of their SA returns and reminder notices accordingly to make sure a ‘notice’ is given.

However, given the decision it will be interesting to see whether other taxpayers challenge daily penalties previously issued and if HMRC will appeal the case.

A Property Business Can Qualify for Incorporation Relief

Ramsay v CRC – A Property Business Can Qualify for Incorporation Relief

Mrs Ramsay appealed against HMRC’s decision to deny her rollover relief under TCGA 1992 s.162 on the transfer of a property into a company – otherwise known as incorporation relief.

HMRC said the gain did not qualify for the relief as the property was not a business when the transfer was made.

The case was initially decided in favour of HMRC at the First-tier Tribunal.  However, the case was subsequently appealed to, and heard by the Upper-tier Tribunal.

Background & Relevant Facts

The taxpayer inherited a one-third share of a block of flats in 1987. She took over the administration for the whole building in 2002 and gifted half of her share to her husband in February the following year.

The couple spent about 20 hours a week attending to the building, making sure the rent was paid on time, cleaning communal areas, forwarding post to tenants who had left, and ensuring the property was insured and complied with fire regulations.

The taxpayer purchased the rest of the building from her brothers, and in September 2004, she and her husband transferred the property to TPQ Developments Ltd in exchange for shares in the company – incorporation relief was claimed. The couple made a gift in August 2005 of all their shares in TPQ to their son, who became the sole shareholder and director of the firm.

The Case

HMRC claimed the incorporation did not qualify for rollover relief under TCGA 1992, s 162 because the property was not a business when the transfer was made. The First-tier Tribunal (FTT) agreed the Revenue’s arguments.

The taxpayer appealed to the Upper-tier Tribunal (UTT).  The UTT found that the FTT’s finding was based on an error of law.

The question which was required to be addressed was a straightforward one; ‘whether the activities of Mrs Ramsay in relation to the Property constituted a business’.

Unfortunately, however, the FTT had concerned itself whether the property activities were sufficient to be taxed as trading income (rather than property income), and whether the property would have attracted business property relief.

The UTT said “business” in the context of s.162 should be interpreted broadly – there was no set test under the legislation.

The judge remarked that the criteria as to what constituted a business in Customs and Excise Commissioners v Lord Fisher [1981] STC 238 were helpful, even though that case concerned VAT.

In this instance, the work carried out by the taxpayer satisfied the tests laid out in Lord Fisher. As to the question of degree, the taxpayer’s activities in respect of the property amounted to a business for the purpose of s.162.

The taxpayer’s appeal was allowed.

Finance Bill 2013: Changes to the Statutory Residence Test

As of 6 April 2013, whether an individual is resident in the UK for tax purposes will be determined by the Statutory Residence Test.

It is designed to give taxpayers greater certainty and clarity as to whether or not they are UK-resident for tax purposes. This in turn will provide certainty as to whether or not they are subject to UK income tax and capital gains tax.  Due to the drafting of these rules, it remains to be seen whether the goal of greater clarity will be met.

In December 2012 HM Revenue & Customs produced draft guidance and legislation for the Statutory Residence Test.  The legislation has since been updated in the draft Finance Bill 2013.

The Main Changes

The main changes to the statutory residence tests were the introduction of ‘sufficient hours’ and the addition of a fifth automatic overseas test.

Sufficient Hours

In the first draft both the third automatic overseas test and third automatic UK test contained reference to ‘full-time work’. This phrase has now been replaced with ‘sufficient hours’, and there is a corresponding test to determine whether an individual has worked ‘sufficient hours’.

The sufficient hours test has been criticised as it does not allow for an adjustment (when determining whether sufficient hours have been worked) for periods of absence other than annual leave, parental leave, sick leave or embedded non-working days.

Therefore an adjustment is not allowed for agreed ad-hoc leave, such as compassionate leave or study days.

The provisions regarding gaps between periods of work are also highly restrictive, applying only where the gap is one between two employments.  It has not been extended to gaps between an employment and a trade, or two trades.

Generally speaking, the sufficient hours test is met when an individual works on average 35 hours per week after making the allowed adjustments, although the actual calculation is complex.

Fifth Automatic Overseas Test

A fifth automatic overseas test has been added where an individual dies during the tax year.

It is, loosely, a test which applies to those who die during the year and who have become non-resident in a previous year because they have gone to work abroad.

Potential Problems

The two most important areas where changes have not been made are in respect of the accommodation tie and of the definition of a ‘home’.

The accommodation tie still contains concepts which have no precise definition such as ‘a holiday home or temporary retreat’.  This is likely to lead to differing interpretations of what is and what is not a holiday home by HMRC and taxpayers.

Perhaps more importantly the Statutory Residence Test uses the concept of home, which is a notoriously difficult word to pin down as it can bear a wide range of meanings.  Unfortunately no clear and exhaustive definition of what constitutes a home has been provided by the Statutory Residence Test which is likely to cause ambiguity in its application.

Prevailing Practice becomes Harder to Apply

“Prevailing Practice” prevents HMRC from recovering underpaid tax which has arisen from over claimed reliefs provided that the claims were made through practice prevailing at the time.

The recent case of Boyer Allen Investment Services v HM Revenue & Customs may make the application of prevailing practice more restrictive than previously thought.  The ‘prevailing practice’ in question was the tax treatment of contributions to an EBT prior to the case of Dextra.

The tribunal dismissed the company’s appeal on the basis that “to be a practice, it must be something capable of being clearly articulated, and articulated not just by the Revenue, or just by taxpayers’ advisers, but by both, and by both in the same terms”.

The Tribunal also noted that there is a difference between what simply happens in practice and the identification or establishment of a particular practice.  A common misunderstanding of the legislation cannot therefore give rise to a “prevailing practice”.

The taxpayer lost because th Tribunal did not believe that advisers would have been able to articulate HM Revenue & Customs’ supposed practice and it was agreed that there was a common misunderstanding of the interpretation of the rules by both HM Revenue and Customs and the tax profession.

Bank Employee is Taxed on Beneficial Mortgage – J Flanagan v HMRC (TC02161)

The First-Tier Tribunal has recently heard the case J Flanagan v HMRC (TC02161).

An employee of RBS plc took out a mortgage with his employer.  The terms of the mortgage were better than those available to normal RBS customers.

HMRC assessed Mr Flanagan with tax on a benefit in kind through the provision of a “Cheap Loan” by his employer (ITEPA s175), because the rate of interest was lower than the official rate determined by HMRC.

Mr Flanagan appealed on the basis that there were mortgages available in the open market with a lower interest rate than the official rate.

In upholding HMRC’s assessment the Judge had sympathy for the appellant but stated that under the rules tax was technically and correctly due.

Bank employees beware!