I have recently taken on a new client that has not filed a p11d or ct600a in respect of a substantial overdrawn directors loan. Late filing of P11ds is an expensive process.
It is quite common to take on new client business only to find the previous agent has made a hash of things (there but for the grace of God..?).
The penalty regime, as it stands, provides no support to a new agent when persuading a new client to put their house in order. Very oiften the client is unaware of how badly the previous agent handled thier affairs, but this ignorance, often the result of misplaced trust in the previous agent's ability, potentially lands them with hefty penalties when the new agent puts things right.
Perhaps the best example of why I think its time to look at this was when I persuaded a client that the previous agents work was so diabolical that the only way forward was to contact HMRC and tell them the situation (the accounts/p35/vat were basically made-up) and request time to put things right - the clients reward was a full in depth enquiry.
Tax law should have incentives and rewards for real attempts at honesty and complicance as well as a system of penalties for those who simply do not want to play ball.
As accountants, we tiptoe through the minefield of clent aspirations, MLR, complex tax law and worst of all (in my view) a supervising tax authority that cannot see beyond the end of the big stick it chooses to wield, all too often at the easy targets.
Mark Asquith
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Of course I agree with Mark - up to a point
Whilst not obviously applicable in this scenario, I would be wary of new clients that blame their previous adviser. You may find that it is indeed the client that did not provide sufficient information rather than the previous accountant's error.
Mark's spot on with his moan though. Owning up to a serious problem usually lands you with a full enquiry of an error that has been discovered and is about to be put right. Whilst I appreciate that the Revenue have a duty not to ignore potential other errors, surely a less expensive review process could result where the professional adviser and Revenue work together to ensure that all is put right.