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For Nick Walton, 2005 marked the start of a tumultuous five-year tax battle when he received a letter from HMRC that questioned his tax return. They didn’t tell him what the issue was.
The investigation was thorough. In the first interview, an enquiry officer asked about Walton’s job as a freelance journalist and honed in on a David Beckham book he had claimed as an expense. Walton, who had tried to line up an interview with the ex-footballer, showed newspaper clippings to demonstrate that he had interviewed celebrities. In Walton’s next interview with HMRC, four months later, a tax inspector asked if there were any documents to demonstrate that he bought the book in the belief that he would interview Beckham, rather than for his own enjoyment. He says the investigation carried on in a similar vein.
While Walton went to an accountant at the start of the investigation, he says he received poor advice – they told him he’d be fine to go into a meeting on his own.
But Walton wasn’t without fault. He admits, confused by the form, he had wrongly claimed his wages as an expense. But he had explained that he was confused in the further information box in his tax return. “I was unsure enough to flag it up and I expected HMRC to get back to me if there was an error.”
Walton claims HMRC continued to grill him after the second meeting. “They kept on asking me for information, but the more I gave them, the more they asked for. They were sending me detailed four-page letters full of requests and I was sending back answers that ran into hundreds of pages. It just went on and on.”
Walton says the whole episode caused a lot of strain. “I’ve been to war zones, but I’ve never experienced stress like this. I’d live in fear of brown envelopes coming through the door. I was unable to sleep.” It finally did end and Walton now runs the website TaxHell advising others what to do if HMRC comes knocking. Today all of his tax returns are done by an accountant.