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17th April 2009: Legal interpretations, and expense procedures
Let's face it, the law can be a tricky thing at the best of times where interpretations and "loopholes" abound. We at Gabem work with this all the time. There is no such thing as an approved set of procedures from HMRC for what we do. We need to rely on (expensive) legal advice and case law. You can bet that the guys from thepiratebay who were prosecuted and sentenced to a year in prison today in Sweden would have liked clear black and white legal advice. Maybe they thought they did.
In simple terms, they created a website that listed links to people who were sharing parts of files, be they copyrighted or not. They weren't hosting any of the files and they had no input into what was available. Under Swedish law that made things somewhat tricky. As far as the guys at thepiratebay were concerned they were in the clear even if it was a little "under the radar". It wasn't until today that there was a clear ruling on the matter.
This difference between the letter of the law and interpretation of events happens all the time; does taking a pen from work count as theft? Well yes it does, but who hasn't done it by accident or on purpose? It's a rare employer that would make a fuss about something so small.
The sticky area of expenses is another case in point. We all know it's possible to pad out expenses or make a mistake (see my earlier blog referring to the Home Secretary's recent embarrassment). Some companies may see it as just something that happens and accept it but HMRC is not nearly so forgiving as technically its fraud. This is why HMRC is focussing so much of its energy on our sector. They believe, rightly, that as a result of the fraud the Exchequer is losing millions of pounds. It is only a matter of time before companies and individuals will be prosecuted and be liable for back payment of tax.
This is the reason that we monitor expenses as stringently as we do even with our recently awarded dispensation. We've sought the best advice to ensure that not only are we as compliant as possible, but you are as safe as possible. I am sure you will agree that its better to sleep at night rather than risking an investigation and costly fine , all for a few extra pounds.
Hugo
17/04/2009
