If I could turn back time .............

If I could turn back time .............

Didn't find your answer?

A new client arrives, having prepared and submitted her tax returns for 2003/04 and 2004/05. Having reviewed what she has submitted it is clear that things could have been arranged far better, resulting in substantial tax savings. What now ?

Is it possible to restructure the business and restate the accounts and resulting tax returns and thereby claim the tax savings. The impact could be the difference between sink or swim.

Essentially, she has currently prepared the accounts with the business in her name as sole trader. The business is funded by husband who is a 40% tax payer. The losses of the business are therefore simply carried forward rather than offset against husband's other income. The cash starved business is therefore not benefitting from the possible tax repayments that could have been claimed had things been arranged differently.

I know its a long shot, but what do others think?

Many thanks as always for the sounding board.
Jamie

Replies (4)

Please login or register to join the discussion.

avatar
By carnmores
05th Aug 2005 18:47

JS glad to see you are still at it
i had forgotten if i ever knew who was reponsposible for the moving finger so thanks for enlightening me

Thanks (0)
avatar
By AnonymousUser
03rd Aug 2005 18:41

You cannot change the past

As I have reminded TaxZone readers before, Omar Khayam said it all:

The moving finger writes,
And, having writ, Moves on;
Nor or thy piety nor wit
Shall lure it back to
Cancel half a line,
Nor or thy tears wash out a word of it.

Thanks (0)
avatar
By martinfoley07
03rd Aug 2005 16:39

...agree...
...with first poster. Rewriting history is a path to big problems. Unless it is a genuine [***]-up, no basis for resubmission.

I had a situation where I did resubmit everything done in prior years, because it was a genuine partnership but returns and accounts doen as sole trader(goodness knows what previous accountant had been thinking). Both spouses were full time in the business, both professionally qualified in the business, joint bank accounts, joint ownership of business property, joint loans, joint registration with regulated suppliers etc etc. So I just claimed mistake/error in earlier tax returns as far back as I could go.


But I would not try it on for back "planning" - sounds as if this is rewriting history, not correcting an error, and it can quickly become fraud to hope/pretend otherwise.

Thanks (0)
avatar
By adam.arca
03rd Aug 2005 13:17

Be careful
You need to be careful about timing when tax planning.

To some extent, the word "planning" is the key one here: you can generally only change the future not what has already happened. So, if something has already happened a certain way, then that is probably an unarguable fact and should not be wrapped up as something different.

To be specific about partnerships, the Revenue will argue that the existence of a partnership is a question of fact. Can your client prove that the partnership existed when they would like it do? Do their invoices make clear that it was a partnership, was the bank a/c in joint names etc etc?

Thanks (0)