Thanks in advance for taking the few minutes to look at this question
I have a client (Doctor) who has only just registered for Self assesment. Late registration. For years 01 Apr 2009 to current date. He just registered in time to include YE apr 2010 yr. A failure to notify disclosure is being put in with the returns. It is a deliberate unprompted disclosure. Any advice on how best to make the failure to notify disclosure would be helpful. Yet the HMRC guidance is also quite clear on this. So not too much of a worry.
His calculations show the following
Year end Trading income Employment income
Apr 2010 -2093 2164 Loss in trading and underpaid PAYE
Apr 2011 -2198 6161 Loss on trading and underpaid PAYE
Apr 2012 -1541 5612 Loss in trading and Underpaid PAYE
Apr 2013 4527 -7898 Small profit and Overpaid PAYE on a D0 cumilitive 40% tax code from M1 to M12 on employments
Apr 2014 25,655 -8339 Profit of 25.6k and Overpaid PAYE on a D0 Cumilitive 40% code from M1 to M12 on employments
These are actual figures in each year of trading I have not carried forward or back any trading or employment income or losses for the purpose of above.
My concern is that because of failure to notify this client is liable to an additinal final fine for each year of 20% upwards of the tax liability due for that year. In the Years Apr 2010 to Apr 2012 this adds up considerably against the underpaid PAYE. I cant offset Trading income against other income as the 22months deadline to use this has passed. So I beleive I am carrying forward the Trading loss each year to use up in the 2013 & 2014 years respectivley. Is there any way to offsett the overpaid PAYE in Yrs 13 & 14 against the underpaid PAYE in yrs 2010 to 2012 before the underpayments become liable for Failure to notify fines? I am unsure if HMRC will apply the failure to notify fines first. Then carry back the overpayment afterwards to cancel out the underpaid PAYE?
I rang HMRC spoke to a technical adviser who told me this was not possible and I would just have to show each year as it was and the overpayment would be carried back after all returns are in and calculated. Which lead me to worry about failure to notify fines being applied before on each years underpayment and tax liability before this was set off.
Awaiting a call back from the team that deal with failure to notify?
Any advice on how best go about this would be very much appreciated.