Dividend dispute

Dividend dispute

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Husband and wife Ltd company, shareholding split 70/30.

Husband takes small salary, wife doesn't.

Dividends declared each year.

Wife has been claiming tax credits and has never reported the dividend income in her tax return - going back to 2005.

Now, all our fault and the previous agent, and is demanding that her tax return is corrected......ie dividends removed.

I have advised that I cannot falsify details, but that from now she can give the shares to her husband. Again, demanding all our fault, they never knew about this etc etc.

Her attitude is upsetting me. How do I sort this and her?

Thanks

Replies (5)

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By garforth
29th Jan 2014 18:28

difficult

Best tell her the truth,she has made a false claim and can be prosecuted.

I assume that you mean that she has not declared the dividends on family tax credit form (your posting says on tax return form) so unless you and previous agent completed the form you are not responsible.

If they are married joint income forms basis for tax credit in any event so what is her problem.

b..ch

 

Thanks (1)
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By taxhound
29th Jan 2014 19:31

Agree with Garforth

Tax credits are based on joint income so it is pretty irrelevant whose name the shares were in from that perspective. 

Unless the dividends took her into higher rates, her tax returns being wrong will not have meant an underpayment of tax so is this a big problem?  A letter to HMRC advising of the error but pointing out no loss of tax would hopefully resolve the issue.

And if 30% of the divis take her into higher rates, why on earth did she think she was entitled to tax credits in the first place?  The household income must be quite high if that's the case.  Did she think the Government/other taxpayers pay for everything? Did anyone advise her re tax credits?

Thanks (3)
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By Bor2903
29th Jan 2014 21:17

Thanks. Just received an exceptionally agressive email, which to be honest makes her look a complete idiot...however, she is trying it implicate me...hardly! She didn't know she had shares, didn't know the company declared dividend etc. she has signed and approved everything.

Re the tax credits, she and her husband live in separate houses and have done for years. I genuinely wonder why they are together, but they are.

She has made a mistake, and everyone else is being blamed for it. At this time in January, I could do without it. I will be disengaging as soon as possible, as this is not the first 'hassle' she has caroused, then come into the office apologising.

Thanks (1)
Replying to johnjenkins:
Stepurhan
By stepurhan
30th Jan 2014 08:30

The key point

Bor2903 wrote:
...she has signed and approved everything...
So you have proof that she has approved information that she is now saying is wrong.

Point this out to her. Remind her that she ultimately has the responsibility of ensuring her tax return is correct. Make it clear you will not tolerate abusive behaviour on her part, and that if she continues to behave in this manner you will terminate your business relationship with immediate effect. If she does continue, terminate your business relationship with immediate effect. Keep hard copies of the e-mails as proof of not only her unreasonable behaviour, but that you have warned her that you cannot maintain a professional relationship like this. Breathe a sigh of relief that such an awful-sounding person is out of your life.

Consider whether you like any accountant she goes on to enough to give them a heads-up about this. If you do, do it informally on the telephone, not in writing.

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By Minnie136
29th Jan 2014 22:10

Regardless of the tax situation did she or did she not receive dividends?  Even if she did not copy the numbers from her tax return when making her tax credit claim, surely she would have had reference to her bank account?  Or did her husband keep the dividends?  So she potentially has over 8 years of tax credits to repay and a bizarre spousal living arrangement.  What else is this couple up to?

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