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Where Taxpayers and Advisers Meet

Check of SA returns (4 years)

numpty1
Posts: 1
Joined: Mon Nov 23, 2015 3:48 pm

Check of SA returns (4 years)

Postby numpty1 » Mon Nov 23, 2015 4:11 pm

My heart sank this morning when I opened a letter asking for details for 4 years worth of SA returns.

For a few years I've been in a cycle of trying to catch up with Corporation Tax for my ltd co for which myself and my wife have a 50% share each. I'm getting there but I'm still behind currently. To catch up, I've been working about 90hrs a week, every day and every night as an IT contractor. Every penny I get goes straight out to either bills or hmrc.

In year one, divi's were 60k (30k each) and in addition to our salaries, there was nothing further owing for SA. Only I am registered for SA.

In subsequent years (the ones asked for), it's been over into the 40% bracket and I know this sounds stupid but each January I've been working such mad hours that the tax return seemed like something to get out of the way in order to carry on working and so I kept just putting 30k down as the divi every year. To be honest, I wasn't sure whether it was under or over, I just put 30k and thought it was there or thereabouts.

CT and VAT has been my sole focus. Getting this letter today, I've had to go and look back best I can at what the divi's actually were that I've taken. Doing the sums, it looks like I will owe about 40k. My wife will, too, though they've only written to me. She just had a letter recently asking her to complete a tax return for the first time, last week. I was glad about that and intended to do it properly from this point, what a blow this is today. That letter must have been part of something wider.

Right now it feels like the world is ending. I've tried, I've worked every hour I can possibly stay awake for in order to try my best to get up to speed with everything and I was due to be totally clear in terms of the company debt to hmrc by Mar 2016 for the first time ever.

No matter how I play with my spreadsheet, I can't seem to be able to cover this 40k each in anything less than 4 years and that's before any penalty they'd apply.

All I can think of is going to prison and losing the house. I'm absolutely distraught.

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: Check of SA returns (4 years)

Postby LozaACCS » Mon Nov 23, 2015 9:47 pm

It is clear from your post that you have real problems, I do appreciate the stress that you must be under and would not wish in any way to make light of it.
Can I suggest that you bin the spread sheets and find a local accountant/tax adviser to assist you with what is probably a S9A enquiry.
Your affairs are not rocket science and there may be a number of areas where the presentation of your affairs may make a significant difference to the tax liabilities involved.
You appear to be very capable at IT, but not in accounting or tax matters, I would urge you not to proceed further without formal advice.

wamstax
Posts: 1863
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Check of SA returns (4 years)

Postby wamstax » Mon Nov 23, 2015 11:06 pm

While instalment arrangements can be arranged to enable recovery of tax interest and penalties 4 years would not be the norm. They are usually looking at 3 years or less. However as Loza says you really need to get somebody on board that knows what they are doing and hopefully somebody experienced in tax investigations.

The reason I say you need to get somebody on board that knows what they are doing is that it is unusual for a S9A letter to come out and ask about 4 years SA teturns and there may be scope for reviewing the background to the enquiry and HMRCs powers of discovery etc. that you might be unlikely to be aware of
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

SteLacca
Posts: 437
Joined: Fri Aug 07, 2015 2:17 pm

Re: Check of SA returns (4 years)

Postby SteLacca » Wed Feb 03, 2016 5:00 pm

What do the company accounts report? Surely that's the first port of call. Dividends paid to a director should been mentioned in the notes.

wamstax
Posts: 1863
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Check of SA returns (4 years)

Postby wamstax » Fri Feb 19, 2016 12:55 pm

It seems that the question is not how much dividends were paid/voted but the fact that dividends were understated to such an extent that tax of c £40K was evaded. In these circumstances the OP needs professional advice - either from his accountant if he is up to speed on tax enquiries and the implications of (and limits of HMRC's powers ) the tax enquiry and discovery etc etc.

Hope that OP got the necessary advice and has been reassured that if he handles it correctly he is not going to prison. There are also opportunities for his wife's tax liabilities to be reviewed and hopefully those minimised and any penalties mitigated by proactive disclosure to HMRC.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website


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