A recent client - contractor operating through limited comany - appointed us to prepare company accounts, CT600 etc.. First year ended 31 August 2011. I asked if he had filed personal SA return for 2010/11 and he said he hadn't. I suggested we deal with that for him when we had finalised company accounts as there would be some dividends to enter on it. He said OK but as he's working either away from home in UK or on site in West Africa and only home every two weeks communication was difficult and it took a while to get an authorisation code to get him set up as a client online.
Finally it was done and I then discovered that he had done the 2010/11 return online. He has ignored the two employments he had in that year, and endered the first few months turnover of the company and corresponding expenses as self employment. The resulting profit was below the PAs so no tax due. His actual income for the year is nearly £25k but as he was on BR code with the two employments he has actually overpaid tax.
I have his return ready to go on PTP.
My question , which I have struggled to find any information regarding the online sytem, is how do I go about withdrawing the return the client filed and submit the correct one. I can get into the return online and it seems I could just amend it that way, but I cannot find anything which indicates that I could withdraw that return prior to filing another by FBI from teh PTP system.
Has anyone had experience of doing this?
Replies (23)
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I would not withdaw the return, but follow the advice of the "Professinal Conduct in realtion to Taxation" Chapter 5.
This would suggest
a. Contact client and tell them you are aware of the errors you have detailed. Give them a chance to correct them.
b. If no repsonse, then contact them orally (granted this might not be poss given the distance)
c. If still acceptable repsonse, write setting out the obligations to submit correct returns, fines and penalties etc etc.
If still no reponse, then you have to cease to act.
Remember, you are the tax agent, not the one responsble for the correct return.
given the client's recod so far, I do wonder if this is the sort of client you would want - though!
In terms of the PTP system, I am not too sure! But in IRIS you would submit an electroic return, marked as amedned"
Amend on paper
My understanding is that once a return has been filed it can only be amended online by the person who submitted the original.
Obviously you should go through the above before you submit an amendment
Interesting
We have a client for whom the 2010-11 tax return is acknowledged as received in July 2011. It doesn't say whether online or by paper. It was not submitted by us nor (according to our client, and I believe him) by our client. The return filed was completely wrong, so we just went ahead and filed online over the top of it. Well, our filing has yet to be processed onto the system, although it passed through the gateway and we have the receipt. As there is tax payable (and client has squirrelled away ready for the demand) we have been thus far content to let it ride and see what father christmas brings in a year or two.
With kind regards
Clint Westwood
You should be able to file an amendment online
but, your third party software needs to be able to reflect that what you are submitting is an amendment rather than an original otherwise it will not make it IIRC.
@Clint
Surely for a 10-11 return the client should not be waiting for a demand if the return that you have submitted as an amendment shows a liability, and on the face of it a return had been required on time by HMRC. I should have thought that the tax should be paid on account ASAP to stop interest and possible surcharges?
We had a similar problem @nogammons....
HMRC online showed SA as filed. We hadn't filed it and client swore he hadn't filed it. I telephoned HMRC and they said a new submission would be ignored, so we filed an amendment. HMRC then telephoned us to say we had made a mistake as we had filed an amendment when the original had never been submitted!!!!
We had a screen shot of the HMRC online showing otherwise, but it would be more productive to bang your head against a brick wall. We submitted the SA as a new one, and then telephoned HMRC to make sure it was processed.
@bernard
In our case the SA wasn't viewable, which is why we questioned it with HMRC, who assured us the return had been submitted and we would have to submit an amendment ... which obviously turned out to be a load of rubbish!
@OP Any revised return is an amendment
Since the original return is known to be incorrect, it would be sensible to get in an amendment asap in case HMRC pick it up as a potential enquiry case. If you are authorised to act for the client & he signs and approves the amended return for submission, that is sufficient as you are then submitting the return on his behalf and at his request.
Regarding penalties
I thought there was only a penalty on an amended return if the tax resulting from the original was understated.
Would it make any difference to penalties if the client had ticked the "provisional information" box on page 6 of the return?
for other cases...
There might be things like Gift Aid claims you can't make. There was that case (can't remember name) of the chap who filed really early for a tax year in which he sold a business for a large profit. His accountants then re-filed with charity contributions offset from following year. HMRC said this concession could not be claimed on a re-file only on the original submission it was upheld at Tribunal I believe. Not relevant if the revised is only showing income of £25k though!
Online filed return correction
My experience is that if a client has filed their own return through their gateway the only way an amended return can be submitted on line is via the very same gateway - your own software even if it receives an acknowledgement of processing will not be able to actually file over the top of it. HMRC have advised me in the past to file a physical tax return (by post) for which you will obviously require your clients original signature, and it may take (considerable) time to process - been waiting on 1 for 6 months so I think they have lost it but don't want to admit it (they acknowledged receipt). You must mark it as an amended return superceding the online captured return.
Sounds like a high risk client though
Online filed return correction
File 'Amended return, if the amendment window is still open or send a paper return explaining the circumstances.
Client's tax return.
Interesting. I sort of wondered it the replies to the question of amending a tax return were made by HMRC rather than by professional accountants/tax consultants. It's neither the client nor the correction process that's wrong but the HMRC systems and proceedures. They don't operate in the real world. 90% of the business community aren't in accord with HMRC systems, the other (big) 10% are part of the bureaucracy. I read on Accountingweb recently that 85% of companies were aware of RTI. B******s! Not only is this untrue but it's just paying lip service to the relentless advance of HMRC control over business. Stalin would have loved it. C'mon. THINK. Or do you just see it as more work?
Not Really Answering The Question
But if the agent or taxpayer telephones HMRC and makes a successful case for coming out of self-assessment, the online account shows the following statements :-
"HMRC received your tax return on ****" - not true but their program is unable to say "HMRC have agreed that no tax return is required for 2011/2012".
"You can amend your return as appropriate using commercial software" - again not true since I'm pretty sure with PTP you can only amend a return that has already been submitted in that manner.
Apart from that the HMRC site is accurate!
beware fraudsters
where a client's tax return has been filed by neither the adviser or the client. A friend of mine (fellow practitioner) had an instance where someone had got through government gateway and filed a claim for repayment with false details. It prompted e to change my government gateway password, anyway.
Amended Tax Return
What you need to do is submit an amended return, not withdraw the original. I don't know if PTP allows this. the software I use (CCH Personal TAX) does but this is probably more expensive.
Alternatively, you could either submit a paper return with a letter of explanation or speak to the inspector and ask if the Revenue will be prepared to remove the original from their system, so that you can submit another original. As far as I am aware, there is no penalty for an amended return but extra tax liability is likely to result in interest.