E File Group has a first row seat to what is driving new business to tax professionals around the world. Let me share a story with you that we received recently from one of our members. Allow me to preface this story with the fact that it would not have been possible for this tax professional to connect with this taxpayer if not for efilegroup.com. What is a taxpayer to do when caught between two country tax revenue authorities? E File group connects our members with new clients all over the world.
In this case, a (UK) taxpayer cashed in a South African Retirement Annuity for a Lump Sum which was subsequently taxed by the South African Revenue Service (SARS) as an emigration withdrawal. Her Majesty’s Revenue and Customs (HMRC) decided to tax it under Article 17 of the Double Taxation Agreement between the United Kingdom and South Africa. E File Group wrote a post about Lump Sums not being taxable under Article 17. With this information, the UK resident personally submitted a tax refund claim to Her Majesty’s Revenue and Customs (HMRC). They insisted that despite it not being a periodical payment, Article 17 was applicable. HMRC refused and reclassified it under Article 20 where it was still classified as UK taxable (yet the South African taxes could be claimed as a refund).
This prompted this taxpayer to contact E File Group directly for assistance and he advised taxpayer what to submit to HMRC. His newly discovered tax advisor E File Group advised Her Majesty’s Revenue and Customs that they erred in their interpretation of Article 20 in that they had completely ignored paragraph 3 in Article 20. This particular paragraph extends taxation rights to the South African Revenue Service (SARS) on items of income of a resident of the United Kingdom, not dealt with in foregoing Articles of the Convention and arising in South Africa. Read in conjunction with Article 21, paragraphs 2(a) and 3, Her Majesty’s Revenue and Customs had mistakenly disallowed the tax credit the taxpayer had claimed in respect to taxes legitimately levied by the South African Revenue Service (SARS).
Her Majesty’s Revenue and Customs told the taxpayer that a closure notification for an appeal had been issued earlier under the United Kingdom tax law i.e.the taxpayer would have to submit an application for appeal to be allowed. E File Group replied to them that under Article 23 read with Article 24, the taxpayer had the right to an appeal and that Article 24 has no timeline to it.
As a result, the outcome was that Her Majesty’s Revenue and Customs has accepted and agreed to taxpayers appeal and they received the tax refund. Without connecting E File Group, this taxpayer told us they would have been unsuccessful with their claim to Her Majesty’s Revenue and Customs who tried every avenue to dismiss the taxpayer’s claim for a refund. Congratulations on a great and profitable connection between E File Group.
E File Group mission is connecting tax professional members to taxpayers all over the world.
