I'll give the full scenario of this after asking the main question.
I've been tasked to complete a self assessment form for year end 2011. Yes it's overdue!
I have a handwritten list of payments from the business of monthly payments made on invoice i.e. the self employment side of this.
I also have what looks like a payroll produced sheet of payments from a now liquidated company of payments i.e. the "in employment" part. These total in excess of £19,000
However the P60 for year end 2011 shows an income of £714 with no tax deducted.
The person I'm doing this return for is as dizzy as dizzy can be. She keeps telling me she had tax deducted so I've sent her away to find payslips which she thinks she's kept. When I asked her why there's a discrepancy in the figure on P60 she hasn't a clue.
She hasn't provided any paperwork apart from these two lists of payments, i.e. no bank statements, no invoices from her self employment. She doesn't reclaim any expenses at all.
What would you advise?
The full scenario is that she took her paperwork in 2012/3 to a retired accountant who had advertised for work. (Strangely enough I met this man about 15 years ago, and a lovely soul he was). Well he's now in his late 80's and not up with technology, hence paper returns in use. Having taken these sheets of paper to the accountant, she signed on the dotted lines so that he could complete and post the returns. And that was that.
Next she receives the penalty for non filing (£1200) for year end 2011, and same for year end 2012. She tried to contact the accountant, no response by phone, went to his flat, no response either. Having asked me what to do I suggested she try the flat again as there was no trace of him being deceased. Transpires she'd been to the wrong flat previously. He tells her he'd passed her paperwork & returns on to a local Accounting Firm and there they stayed. It seems they made no attempt to contact her (although her number is clearly on the folder), and they told her they'd been expecting her to contact them. Well as she had no idea they had the paperwork that was never going to happen.
I can see why the first accountant didn't send the returns, because he, like me, was obviously confused by the P60 stating one thing, while the payroll sheet showing something else.
What a mess!
Any comments (polite ones please) will be gratefully received as this is going round in my head and coming back to the same conclusion which could be wrong, i.e. the thieving liquidated company weren't paying over HMRC deductions. Given that the company directors were fined £40k for breaching trading standards perhaps I'm not too far out.
Replies (7)
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Firstly, get a deposit up front from her.
Contact the firm that seems to have all the relevant information for what used to be 'professional clearance' and handover.
Only then can you see if you have sufficient information to make sense of any of this.
If not, request the client to provide bank statements that will give you a chance of piecing together the facts. She can request them from her bank. It might cost her but that's the price of dizziness. Give her a deadline to provide them.
If she can not do that, I would walk away. You will already have done enough to earn your deposit.
No chance there were two employments?
I suppose there is no possibility there were two employments and the P60 does not relate to the employment from which the >£19,000 net was received?
Are you sure, from what you have seen, that the sums which total>£19,000 are from an employment?
Other than above I am afraid I cannot offer much more that may/may not be pertinent.
I would guess gross not net from what you describe
The payroll report was printed on 14/5/2012 and lists the weekly payments from 4th April 2010 to 3rd April 2011 (which although I assume they are net payments, the majority are nicely rounded whole figures. They list basic pay of £13k, commission of £4.5k, holiday pay of £676.00 and travel expenses £419.50.
The P60 is for year end April 2011, employer's name being the same as the print-out and shows total pay for the year £714.00 with no tax deducted.
There is an employer PAYE reference number. Would HMRC speak to me about this (not registered as this person's agent yet, so I suspect not), or would dizzy need to contact them?
The payroll figures sound more akin to gross pay than net pay, given the split in description you describe. I cannot envisage when I would ever have an analysis of net pay under these heads; for one thing how would it be computed, how would nil rate bands/ free pay be applied to each category?
Good luck with your investigations.
Depending which payroll programme was used that the P60 was printed at a different date to the payroll information you are looking at
Get an employment history
Ask Dizzy to phone HMRC and ask for an employment history to be sent for the year. This will show the information that they hold about her. This coupled with the bank statements might mean that you can re-construct the net to gross figures for the year.