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Where Taxpayers and Advisers Meet

Friend worried sick but wants to put it right

At_a_loss
Posts:5
Joined:Sun May 14, 2023 10:42 am
Friend worried sick but wants to put it right

Postby At_a_loss » Sun May 14, 2023 10:50 am

A friend of mine has a company with her partner. Accountant had set up the company 50/50 (not as requested but that I guess is another matter). The partner was registered for SA by the accountant but nothing was mentioned about my friend. For years there was no tax due but last few years the thresholds changed but the accountant still didn't mention it to either of them and they didn't realise that the changes had meant that she owed tax. They just realised this week and want to sort it and understand there will be back tax and penalties. They spoke to the accountant who advised just doing last year and nothing else (something neither my friend or partner want to do). Can anyone advise where I can point them to get some help? They are both sick with worry at the minute and want to get it sorted but have lost trust in the accountant.

Anyone have any advice on steps to take and support they need to ask for. Neither of them are tax professionals and feel really let down by this accountant.

darthblingbling
Posts:697
Joined:Wed Aug 02, 2017 9:09 pm

Re: Friend worried sick but wants to put it right

Postby darthblingbling » Sun May 14, 2023 2:10 pm

What exactly is being paid from the company to the individuals

At_a_loss
Posts:5
Joined:Sun May 14, 2023 10:42 am

Re: Friend worried sick but wants to put it right

Postby At_a_loss » Sun May 14, 2023 2:23 pm

A small salary and dividends. Apparently 50/50 split

bd6759
Posts:4234
Joined:Sat Feb 01, 2014 3:26 pm

Re: Friend worried sick but wants to put it right

Postby bd6759 » Sun May 14, 2023 10:17 pm

Any accountant / tax adviser worth their salt, and working within their association’s rules, would require you to make a full and complete disclose.

You first step is to tell you accountant this. If they refuse the work then disengage them and be sure to inform their professional association why.

Find a another accountant. Never easy without a personal recommendation. You need to search online and read reviews.

wamstax
Posts:2017
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Friend worried sick but wants to put it right

Postby wamstax » Mon May 15, 2023 1:32 am

Bd6597 is absolutely correct in that the best (and only) strategy is to get an experienced tax adviser to fully review matters with a view to assisting your friend (and the company and other party involved if appropriate ) in making a full and voluntary disclosure to HMRC before they come a knocking.
Looks like the accountant has not served them well and while an experienced tax investigations specialist (TIS) would be best to run the voluntary disclosure a new accountant going forward might well be needed. Experienced and specialist TIS will not really be interested in doing the day to day normal GP etc functions going forward. depending on the amounts of evaded duties and the full facts as regards non-disclosure it might be necessary to consider getting the protection of Code of Practice 9 if there was any deliberate/fraudulent tax evasion
Hope this helps
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

At_a_loss
Posts:5
Joined:Sun May 14, 2023 10:42 am

Re: Friend worried sick but wants to put it right

Postby At_a_loss » Mon May 22, 2023 6:15 am

Thank you for all the replies. They are in contact with someone to sort this out.

One question that no one seems to know the answer to is if student loan repayments would be penalised as well.

For example if the tax owed was 10k and the student loan was 15k would say a 40% penalty be applied on the 10k or on 25k? Does anyone have any idea on that? Student loan payments aren't a tax but obviously collected via the tax system but would not be a loss of revenue for HMRC.

bd6759
Posts:4234
Joined:Sat Feb 01, 2014 3:26 pm

Re: Friend worried sick but wants to put it right

Postby bd6759 » Mon May 22, 2023 12:01 pm

Again, a competent advisor should know this, or at least be able to find it.

The failure to notify and the inaccuracy penalty provisions apply to student loans by virtue of the student loan regulations.

At_a_loss
Posts:5
Joined:Sun May 14, 2023 10:42 am

Re: Friend worried sick but wants to put it right

Postby At_a_loss » Mon May 22, 2023 12:17 pm

Again, a competent advisor should know this, or at least be able to find it.

The failure to notify and the inaccuracy penalty provisions apply to student loans by virtue of the student loan regulations.
Asked a lot of people now and nobody has any idea.

Is it just an idea to assume penalties against everything?

bd6759
Posts:4234
Joined:Sat Feb 01, 2014 3:26 pm

Re: Friend worried sick but wants to put it right

Postby bd6759 » Mon May 22, 2023 1:24 pm

No need to assume. Penalties do apply.

At_a_loss
Posts:5
Joined:Sun May 14, 2023 10:42 am

Re: Friend worried sick but wants to put it right

Postby At_a_loss » Mon May 22, 2023 1:36 pm

Ok thank you. I'll tell them to expect more. Thank you for the advice


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