Incorrect VAT returns and SOCA report

Incorrect VAT returns and SOCA report

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Client brought in his books etc for us to prepare his annual accounts. On doing this, it quickly became apparent that he had completed and submitted to HMRC, all of his VAT returns.  I have prepared the accounts based on the correct figures and notified the client of the errors and what he needs to do to correct this situation.  The client admits that he doesn't understand VAT or how to complete his returns.

My problem is, that having informed him of what to do and how to correct his mistakes, or letting us act on his behalf and submit the corrections for him, I am fairly certain that he will not do this, as he has approx £10,000 of underpaid VAT to pay.

Without knowing for sure whether he has/will submit amended returns, should I be submitting a SOCA report or doing anything else?

Replies (4)

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David Winch
By David Winch
08th Aug 2013 20:19

How about ...
How about warning the client of the potential penalties & interest, telling him that HMRC are bound to find out sooner or later (which they are) & offering to help minimise the penalties.

If he doesnt respond positively within 3 months then file a report with SOCA & resign.

David

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Replying to chatman:
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By 1chillibass
08th Aug 2013 21:42

Thanks David.  I have already

Thanks David.  I have already done all of this and put it in writing to him along with a 64-8 to authorise us to act for him for VAT and help sort it out but he has just ignored this and returned his accounts and SA return to us.

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blue sheep
By NH
09th Aug 2013 08:19

Is there evidence of money laundering yet?

I would mostly agree with David, however how will you know whether or not he has responded and corrected his VAT until you see the books the year after?

If the client does not want you to act for VAT, I would suggest that you cannot file a MLR until the year after when you see that he has not complied.

On the other hand, if you wanted to cover your back you could file a report, but what would it say - "my client has made a mistake, I have told him about it but he may or may not take my advice"

Of course in the meantime you could suggest he goes elsewhere.... 

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By Novakova
11th Aug 2013 14:00

form 642
It would be easier for the client if, having informed him where he went wrong, you send him a completed form 652 for approval and signature.
If the net value of the errors does not exceed the
greater of:
• £10,000, or
• 1% of the box 6 figure required on the VAT return for
the period of discovery, subject to an upper limit
of £50,000,
then of course correction can be made on the next VAT return (much simpler, but not recommended).

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