Amendment of tax return and calculation of penalities ?

Amendment of tax return and calculation of...

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The previous accountant submitted estimated tax returns to avoid penalties.  The client did not keep proper records hence the accountant took action and filed.  However the figures were long way from actual.  The client did pay the estimated tax liability albeit late

The client now has managed to get his act together and wants me to submit the true returns for 2010/11 and 2011/12.

My client will have around 20K additional tax to pay in 2010/11 and 10K in 2011/12

I assume the penalites for the late Tax/NI payment will be 5% sucharge for month 1, 6 and 12.  Then possibly another 10% for being careless in providing the incorrect tax figure plus of course interest when the tax became due.  Is this correc

Could HMRC argue that late return penalities apply since we avoided the penalties by submitting a very inaccurate return in the first place.

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By mikeyban
20th Jul 2013 17:42

2011/12 still open to amendment.

Surcharges and interest will be due.

2010/11 will be a discovery assessment and penalties due but should be low due to cooperation.

The payment is the real problem.. Has client got the money?

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By Jim100
21st Jul 2013 22:31

Payment

My client would like to pay the tax over six months so not sure if HMRC would allow such a proposed payment plan

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By mikeyban
21st Jul 2013 22:38

It will take that long to transfer it to court so they might huff and puff but they will have to accept.

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