Money Laundering - Dirty World of Small Practice?
I hope you are well. I am a little lost and seeking some guidance as to where I stand in respect of my rather difficult situation.
I am currently employed in an ICAEW regulated firm and have come to suspect that all is not quite what it seems to be. The practice appears to be a front for, frankly, tax evasion. The extent of the evasion I believe is going on and has been for some time stems from gross misconduct and negligence on behalf of the Owner of the business. It has not gone as far as deliberately assisting known or suspected criminals to hide money, but to my mind Clients are misguided into becoming unknowing criminals through following advice given.
To give you an indication of what goes on:
(1) Unsubstantiated debits to the profit and loss accounts in order to reduce total taxable profits, usually credited to the DLA to allow for further profit extraction free of tax.
(2) Recognition of Goodwill et al on the incorporation of a Company with a corresponding DLA credit despite not recognising a Gain on the relevant individuals ITSA Return.
(3) "Assistance" in restricting VAT payable for a quarter for clients "in need" by either deliberately accelerating input VAT or deferring output VAT.
(4) Further assisting "in need" Clients obtain financing from HMRC via raising an invoice between two associated businesses with one on cash accounting and the other on invoice accounting with no basis for charges and ignoring the rules for invoice accounting relating to unpaid input VAT over 6 months old.
(5) Introduction of assets to the Company (which had been incorporated long ago) with a DLA Credit at a significant over value and even subsequently claiming AIA (despite from a connected party)
(6) Disregard for review of whether or not Goodwill falls within the IFA regime.
(7) I have yet to see a P11D completed, or P11D(X) despite being present for a reasonable period.
(8) Unsubstantiated Use of Home and Mileage claims.
(9) Mileage claims at SMRS where the cars are on the balance sheet.
(10) Disaggregation of businesses to avoid VAT and to allow for "the cars to be used". Essentially the sole trade / partnership being made to incur losses then carried back against previous income whilst the Company makes significant profits.
(11) Claiming input VAT chargeable over the life of an operating lease on day 1 of the lease instead of in accordance with the lease term.
(12) Ignoring Long Funding Lease rules re Capital Allowances.
(13) Capitalising a Partner Member's "time" and then claiming AIA on said time as an asset creating a substantial Income Tax loss and then claiming a rebate. Nb no corresponding "business" or sales made on the relevant Partner's own account. .
(14) Suggesting that a Company improve its results by accounting for Revenue on a WIP contract almost a year in advance.
(15) Declaration of wages to Wife and Children up to the Secondary Threshold without regard to other income or reporting on P35.
(16) No CT600A completed and overdrawn DLA "hidden" in debtors, possibly over several years.
I can't accept that Practice is supposed to be like this 'at the coal face' as I am often told. Many clients simply follow what they are told to do and I firmly believe they do not know that they are being guided into a terrible situation.
Thoughts, guidance and suggestions are all welcome. Please. As you may have guessed, the MLRO IS the owner.