Questions of cash: I won bumper payout after HMRC battle exposed case of bad advice


Q. HMRC tells me I must pay tax on the nominal profits on a land investment, from which I have never seen any cash profits. In early 2000 I lost my job due to injury and received a lump sum. I went to the accountancy firm BDO Northern Ireland, which advised me to put £25,000 into a joint-property investment with some of their other clients. I found out years later that our lump sums were topped-up through mortgage borrowing.

In the early years, the scheme made a nominal profit, which is why HMRC is asking for payments of tax of £2,200 – which I don't have and can't afford to pay. My intention was that the proceeds of the investments would be used to support my daughters at university. But there are no profits now that Northern Ireland's severe property crash has destroyed the value of the investment. Can you ask HMRC to recognise that I made a loss, not a profit? EW, County Down.

A. We approached HMRC, but it did not respond. However, it seemed to us that the bigger question was why BDO Northern Ireland, a leading firm of accountants and financial advisers, should propose that you invest in a property deal that was speculative, high-risk and did not appear to fit with your risk profile or financial objectives. We put this view to BDO NI, which then entered into protracted discussions with you. These did not seem to us to be leading to a satisfactory offer from BDO NI.

We therefore asked financial advisers Hargreaves Lansdown for its view of what would be an appropriate settlement in the circumstances. It calculated that, had the funds been placed in a low-risk investment, earning base rate plus one per cent over the period of the term, your investment would now be worth £35,367.68. We also discussed the matter with the Financial Ombudsman Service, which told us that, assuming it upheld your complaint, it would consider your risk profile. It might also decide the settlement should be based on the likely return from a stock-market investment. Given the volatility of stock markets it is very difficult for us to conclude whether this would have generated a higher or lower return than the simpler approach of base rate plus one per cent.

You remain liable for the £2,200 tax bill on the original property investment, so it is important that the settlement does not lead to an additional tax liability for you. A spokesman for BDO Northern Ireland said: "On receipt of a query from [the reader] we undertook to examine the issue in full and to work with our client in resolving this matter. We have now concluded that process in a matter deemed satisfactory to both parties. We are not in a position to disclose the full terms of the settlement of this issue." We told you that we believe the settlement should not be less than £35,000. Due to a confidentiality clause, you are unable to tell us the figure you settled at – but you say you are "very happy" with the outcome.

Q. I have continued problems with my Danske Bank telephone-banking service. Danske Bank insists the problem is with my line, but BT cannot find a fault. I can access the service from other land lines, so the bank seems to be correct. I am reluctant to use my mobile phone as the service uses an 0845 number, which is very expensive. AH, Lisburn.

A. The fault has now been fixed, so you can now use the telephone banking service from home. BT's spokesman says: "This was an unusual fault that wasn't picked up by our remote testing and was just affecting this particular number. This is why the customer was initially asked to contact her bank so that they could test their equipment. The Openreach engineer who investigated updated the connection at the customer's property, but found the main problem was a fault in the exchange, which he rectified."

Q. I flew with Virgin Atlantic earlier this year on my honeymoon. A security tag was attached to the outside of my passport at Virgin Atlantic's check-in desk. When I returned home I tried to remove the sticker and was unable to do so. I phoned Virgin Atlantic and was advised to use nail varnish to remove it. This just damaged my passport by leaving a striped mark on the back page and a dent on the inside back page. I emailed Virgin Atlantic six times asking them to pay £103 for a fast-track service from the Passport Office to replace my damaged passport. I have not been successful. This has been going on for several weeks and I cannot allow this to go on any longer as I am travelling abroad in July. MV, by email.

A. A spokeswoman for Virgin Atlantic says: "As a gesture of goodwill, we will reimburse her the full amount to replace her passport." You have now received £128, covering the cost of the Passport Office Premium service.

Q. My friend travelled home for his brother's funeral and hired a car from Hertz at the airport. He was charged for "extra insurance", though he said no when asked if he wanted any. Hertz says he signed for the extra insurance and so was charged for it. LS, by email.

A. Hertz has produced screen shots of the booking forms showing your friend initialled the "super cover (zero-excess) insurance" option. It adds that he was served by an experienced staff member, who has not been the subject of a similar complaint. But Hertz accepts your friend was unaware what he was signing. As a result, and given that he was distressed at the time, Hertz has agreed to refund the zero-excess insurance premium and has repaid £117.72.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at:

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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