Just acquired a new client who is the spouse of an existing client, who came to me last year.
It would seem that his previous accountant didn't declare a capital gain on the 2013 return that was included on his spouse's return (50:50 asset split). It seems that her previous accountant didn't relay the necessary information to his previous accountant. I'm the innocent party now trying to sort it all out.
I am wondering which is the best way to declare the Capital Gain to HMRC:
1. To simply file an amended tax return which will attract interest and late payment surcharges (each 5% would be significant!).
2. To write a grovelling letter to HMRC to come clean with an amended return and hope they'll amend the account and not charge the late payment surcharges.
Either way could open an Enquiry but we can cross that bridge if necessary - just wanting to reduce/eliminate any late payment surcharges.
Replies (3)
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Presumably the client did actually approve the return that was filed?
And presumably the client was actually aware that there had been a disposal and a consequential capital gain?
And presumably they therefore failed to point this out to the previous accountant?
I would suggest that the client should fess up quickly before HMRC do a cross-check and discover the omission themselves. Unprompted disclosure is the better alternative...
Tread carefully
I think you will have to be careful because you are out of time to amend a 2013 Tax Return submitted electronically but you don't want to send in a paper one and get a penalty.
I would suggest a letter advising them of which entries need including in which boxes. I would also tell your client to pay the additional tax now and point out to HMRC that it has already been paid.