New investigation - immediate demand for private bank accounts

New investigation - immediate demand for...

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Client is a self-employed gardener whose wife works.

Received the usual kind of opening investigation letter but with an immediate demand to see all personal and joint personal bank accounts.

To be honest, the client is a lazy so and so and during the year won £8500 on the horses in one bet (proof of which I have seen) which meant he worked even less than usual!

After review of our file, I am happy that the work we carried out was complete and feel loathe to immediately give the Revenue keys to my clients personal life.

Any opinions?

Paul Evans

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By deanshepherd
07th Aug 2005 17:36


Be careful..


Any attempt to avoid providing the information to the Inspector is only going to raise suspicion.

It is not uncommon in low income enquiries to ask for all private bank account details. Just go through the statements with your client and make sure there are explanations, preferably with supporting documentation, for any income not included in the accounts.


Dean


Free Online Helpdesk from MMI, the Surrey Accountants.

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By AnonymousUser
05th Aug 2005 22:21

Thanks for the food for thought......
Client is not a regular gambler - ive seen the Ladbrokes account statements and he was lucky enough to get a single big win which he took by direct transfer into his account.

This fact was declared on the additional info part of the return, but the inspector seems to have ignored it and used the low profits in isolation as an excuse for a ferret around.

Will have to give this some thought

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By michaelblake
05th Aug 2005 17:01

See Enquiry Manual

The HMRC guidance at EM 1070 suggests that it is reesonable to make the request at the outset where means are thought to be an issue -see extract below

"In checking entries for business income you may consider that sight of the non business bank, building society or credit card details is required. EM2220+ tells you when it is reasonable to request that information. You can ask for private records at the start of your enquiry if means have been identified as a risk or you have already established, for example through telephone contact with the agent, that the accounts are not based on a complete and effective record keeping system EM2221."

If betting wins are put forward as an explanation of cash banked you can expect HMRC to look at that criticaly and require proof that it is what the taxpayer says it is. They will also want to know how much he looses gambling, and to be able to tell them why he can acheive what others cannot which is to beat a system that exists on the certainty that the punter will loose over the longer term.

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By AnonymousUser
16th Aug 2005 20:23

What did the accountants certificate say?

Common to most accountants reports/certificates, I would guess that yours is also limited to a confirmation that the accounts were prepared from information and records presented by the client. It is not so much our work that is under scrutiny but it is the clients business records. So if these records are found not to be ROBUST then the Inspector is entitled to delve into the clients personal affairs. The Inspector is looking for that which is not within the records/information presented to us.

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