I am trying to help out a friend's dad who has got into some bother with his tax. I have some background in tax and was able to offer initial advice and do his return but I have hit a brick wall now.
So his tax return was submitted for 13/14 and he was due a tax repayment of around £2.5k. He is a self employed joiner and had paid tax at source on his invoices. HMRC withheld the tax repayment and then sent him a bill for a further £2.5 (approx) which they are claiming he was due for the tax year 1997/1998.
It pans out that my friend's dad, was a UK resident and had been submitting tax returns up until 1997/98 when he split up with his wife and left the UK to go home to Southern Ireland where he stayed until 13/14. He says as far as he was aware all his tax was up to date when he left the country (he had an accountant dealing with his tax affairs), he strikes me as the responsible type of person and I honestly don't think he would have left without making sure his tax was up to date. I know this is irrelevant when dealing with HMRC though.
However, it wasnt. The liability for 1997/98 was yet to be paid and it still hasnt been paid but obviously on submitting last year's return it has flagged this up.
I contacted HMRC to request a copy of the details from this return and was initially told that they could not provide me details from this far back which I thought would go in our favour, however, after a bit of pressure I received print outs of the return. It turns out the accountant forgot to enter any tax paid for the year resulting in a liability whereas it should have been a repayment as he always received. Plus the accountant failed to enter the overlap relief since it was his last year, which despite the forgotten tax would have brought the liability to nil.
So now he is due around £5k of tax in total with interest etc, due to his accountants negligence. I have tried to argue with HMRC but they are not budging on the basis too much time has passed to change the returns. I also asked for an original return to be produced to confirm that my friend's dad had actually signed the 1997/98 return but they were unable to provide this.
I'm not sure where to go with this, does he just cut his losses and pay the other £2.5k or is there any other route of argument we can go down?
Any advice would be appreciated.