The Area Director has reviewed an ongoing investigation into a shop, and has asked the Inspector to point out the following - quote
"The Revenue do not accept the deposits into private bank accounts, business bank accounts and payments against credit cards should necessarily be used to reduce the cash on hand within the cash account."
Does this make sense to anyone, or are we missing something?
Thanks
Lisa
Lisa
Replies (4)
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Does this make sense?
If we assume that 'the deposits' should read 'that deposits' or 'that the deposits', could the situation be like this....?
On the one hand, you have a cash account showing an improbably high credit balance. On the other, you have unidentified deposits into bank accounts, and payments to credit card accounts.
It might seem reasonable to suggest that the trader has simply not recorded payments from the cash account to bank and credit card accounts, and that the cash balance should be reduced to reflect this.
The Revenue seem to be saying that they will not necessarily accept this line of argument. Presumably they want to treat the deposits as previously undeclared income.
Agree
I agree with Alan’s analysis.
However is there any obligation on a trader to record transfers from the cash account to the bank account? Surely the only obligation is to record turnover and expenses so as to allow a profit statement (not balance sheet – HMRC cannot force someone to prepare one) to be prepared.
I would be pointing this out to HMRC, and telling them to take a running jump so long as the turnover records are sensible and robust.
Area Directors
Is it just me, or are Area Directors incapable of doing anything other than blinkeredly supporting their junior inspectors. It seems to me to be a retrograde step from the days when there was a genuinely independent regional office.
I saw something similar this year, and it turned out
that the officer had created rather an unusual cash control account. Perhaps there is some internal guidance that is prompting this, and certainly this quote seems a bit odd.
Why don't you reply that you do not understand what he means, and can he give you a copy of his proposed cash control?