We have a new client company who has a sole director and shareholder.
We discovered the director has not made any Self Assessment returns since 2005/6.
His Gateway accounts shows most of the subsequent years as outstanding and although penalties have been charged they have been cleared by entries described as not being perused.
We believe the best way to approach HMRC would be to complete all the outstanding returns and submit them all together.
Is this the best approach?
Secondly, who should we approach in HMRC to discuss with (client says he has no documents from HMRC re this)
Replies (10)
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One thing to bear in mind is, at this stage, HMRC will only accept tax returns for 2013/14 onwards. If you submit anything for earlier years they will send them back to you and say they're out of time.
You can submit 2015/16 and 2016/17 (if applicable) electronically but will need to submit the 2013/14 and 2014/15 returns in paper format.
It's also worth checking whether any determinations have been made for any of these years. If so, they have the same legal weight as a tax return and you don't need to submit anything more. But you can voluntarily submit a tax return if the actual tax bill is below the determination.
You can submit 2015/16 and 2016/17 (if applicable) electronically but will need to submit the 2013/14 and 2014/15 returns in paper format.
Or use commercial software which will allow you to submit online all years from 2013-14 to 2016-17.
Mmm be careful.
Actually submitting the returns may well resurrect substantial amounts of penalties.
And, just in case it wasn't clear, you won't be able to submit tax returns for any years prior to 2013/14, either electronically or in paper format.
Unless the client is deceased, which is obviously not the case here, for deliberate concealment of liabilities, HMRC has the power to go back up to twenty years to assess tax that is due. On top of that your client will incur interest and hefty penalties of up to 100% of the lost tax revenue. If however, the client makes an unprompted approach with full disclosure and fesses up then the penalties may be mitigated. Doing nothing and hoping the problem will quietly go away may cause you a bigger problem in the long run...
A final point, while the entries are marked "not being pursued" for now, there is nothing to stop HMRC changing that and lumping it on to any payment demand sent for the returns you file now. Even if they're not pursuing the debt it is still money owed.