Good morning everyone. Thank you for this forum and all the information here, I'm so thankful I stumbled across it ! This will be rather a long post, so apologies, and thanks in advance !
I started a business 4 years ago, in April 2013, managing property. Such that I lease houses ( licensed HMO's-shared houses) on a commercial basis, I then take over all the bills, furnish them, and rent the rooms out individually.
My first tax return was due by January 2015, and I engaged an accountant who was widely promoted by the property industry. My spreadsheets were emailed to him well in advance, in the November. I then heard from a couple of other people, that he'd made mistakes with their returns, so by the second week of January, I made contact with him, to make sure everything was in order. On the phone, I brought up a couple of issues with him, and he assured me they had been taken care of. But when he emailed me my return, for my approval, prior to submitting, these 2 things were not actually on there ! I emailed him back, querying it. He then adjusted the return accordingly, and sent it back to me. There was yet another mistake on there, namely, that he had put my wear and tear allowance as 10% of my gross, and not my net. I emailed him back once again to point out his mistake, expressing my escalating frustration, and his response was to refund me all my fees ( £600 ) because "our relationship had broken down and I had to submit it myself. Which I did. The profit that year was 7k.
I met up with 3 other accountants over the next year, but never found one I felt comfortable with. I think partly because I'd developed a mental block regarding trusting anyone, and partly because I felt that my small business was just too small fry for most of them to be very interested.
The back end of 2015 was an extremely difficult time for me in my personal life, to the point where I was suicidal. I won't go into details. However, I was still managing to run my day to day affairs. I had a very quiet Christmas, and on New Years day, I woke up resolving to myself that it was a new year, and a new start, and I would survive ! One of the houses I had at this time, was not managed by me personally from week to week, I had a girl helping me who did the weekly cleaning, dealt with tenants etc. Over the Christmas period, the house was pretty much empty, all the tenants went home for the holidays. So I decided to go there, and use the opportunity to give it a really thorough deep clean. Within one hour of starting cleaning I realised that the whole house ( 6 bedrooms ) was infested with bedbugs !!!! I couldn't believe it ! It totally freaked me out, and I left. What ensued was me sacking this girl, and months of craziness. Texts and phone calls from tenants at all hours, hours and hours of endless cleaning and hoovering, getting rid of furniture and replacing it, voids, fees to professionals to eradicate it, only for them to come back, crying, hopelessness. It was a really really bad time. I finally got rid of them by the May/June I think.
The same month, January 16, my return for 14/15 was obviously due. I did sit down to do it. However, all I can say, is that with everything else preoccupying me, and demanding my attention, and carrying on running my business, whenever I found the time to sit down and concentrate, it was as if the numbers would just float around the page, and I would end up having a panic attack. I rang HMRC at the end of January, explaining that my return was not done, and what could I do about it ? The chap on the end of the phone told me he could see that I had an extension already, till May 23rd ! Something to do with it was my first year of submitting online/going paperless. I was so relieved ! However, he also explained, that even though I had an extension for the actual return, this didn't transfer to any monies owed. I would still be penalised if these weren't paid. I made a payment over the phone of 4k. (no idea why I came up with that amount )
May came and went, and I was still very much not myself, still fighting these crazy bedbugs, worrying and crying constantly, and running my business. So I missed the extension too.
In the June of 16, , I was involved in a car accident. Taxi went into the back of me, at traffic lights, in the rain. No serious injury, except for whiplash, that did have me in A and E one night 2 weeks later, because I was unable to move, I was in so much pain. The nature of my job is such that it's very physical sometimes. Cleaning, moving furniture, painting and other small maintenance jobs, and gardening etc. I really struggled at this time with it all. But I carried on, as anyone who is self employed knows we have to do.
My tax return just slowly began to feel less and less of a priority. I guess I just developed a sense of apathy about it, and I still couldn't seem to find an accountant I felt I could trust.
Then, in the December of 16, I was in yet ANOTHER car accident. This one much worse, although again, no hospitalisation. Just very severe whiplash. And my car was a total write off. Again. It was not my fault. Guy pulled out in front of me on a dual carriageway...he'd had 12 pints the night before !
I also found out that week, that I was pregnant. It was a surprise, but a very happy one ! Although I did suffer all the usual sickness, tiredness etc, along with the whiplash again, and the physical problems.
So the deadline for the 15/16 return came and went too this last January. I think that the longer it went on, the more immune I became to worrying about it. In April I lost the baby.
So....a colourful couple of years.
4 months ago, I finally found an accountant I feel really really comfortable with, and really supported by. I got my 14/15 done about 2 months ago. 15k profit. I cannot remember the exact figures/proportionsof tax due/penalties, however the whole of the 4k has already gone, and I paid £441 on top. I gave him my 15/16 spreadsheets last Friday,circa 25 k profit and I expect he will get them in by the end of this week.
My accountant is aware of the problems I had with the other accountant, and the crazy bed bug episode, and the 2 car crashes, but not the personal stuff. He advised me to appeal the penalties., albeit, he said it might not help. I was in two minds about it to be honest. After all, I did get very behind, and the penalties are legitimate. However, yesterday I received a message from HMRC notifying me of the penalties for 15/16. £1200 !!! And the tax will be on top obviously . I just do not have this money.
After everything that has happened, I've finally felt for the first time in a long time, that I'm coming up for air, and I'm clearing the decks. This message has made me feel like I've gone 10 steps back, and I just feel despondent again. I am so reluctant to use "personal" matters as grounds for an appeal, and even less reluctant to divulge that information to my accountant to be honest. But the huge bill I now face, has just tipped me over the edge in terms of making that decision.
I think I have to at least try ?
I would very much appreciate the wisdom of anybody's experience on this forum ? Is it worth an appeal, and how would I go about it without involving my accountant ?
Looking back I suppose I could say I wish I had done things differently. However, in all honesty, I don't see how I could have. I had to prioritise. First of all, keeping my business afloat, and cash flowing, which I'm so happy I did. I love my job, and I'm finally at the stage where I'm making a living wage, and things are more stable. And then prioritising my health-both mental/emotional, and physical. I think that speaks for itself.
Again. Apologies for such a long winded post, and thank you for reading if you got this far ! You deserve a cuppa now !
All's well that ends well, and I'm over it, and still standing, and enjoying life/work again !
Propertygirl.