I had a sole trader client I disengaged as he was a nightmare to deal with and the fee just wasn't worth it
I received a letter from HMRC after disengagement notifying me he had come out of the SA system for 11-12 and 12-13 as he as no longer self employed.
When I originally read the letter I thought it related to 12-13, and upon going through some old records today, came across this letter from HMRC and now realise it also relates to a year I was working on, where he had two separate trades on going during 11-12.
I don't want any flack coming my way should he be found out, as I processed work for him (book keeping and management accounts).
Am I supposed to:
A: Ignore it, as when the HMRC letter arrived, I was no longer acting as his agent.
B: Contact SOCA
C: Contact HMRC albeit anonymously.
I don't have an axe to grind personally with this ex-client, I just want to protect myself. Although I do get annoyed at people who don't declare income,when other hard working people pay their dues
Your thoughts would be appreciated.
Replies (14)
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Your explanation is not very clear.
Was 2011/202 the last year you acted for the client in respect of?
So you didn't act for him in respect of 2012/2013?
What is you understanding of what is wrong with the client's 2011/2012 tax return, and what is the source of the information that has led you to that understanding?
Thank you. That helps with
Thank you. That helps with understanding your history with this client. So is the problem that you suspect he may not be declaring his profits?
Pedantic, I know . . .
. . . but SOCA is now the NCA (National Crime Agency).
David
P.S. I do not think you can inform HMRC of your concern without first obtaining your ex-client's permission. However I think you can inform HMRC that you no longer act for him.
Notification
I would be inclined to send letter onto ex-client saying you were surprised to see this information as the last records you worked on came into that period.
As you assume HMRC must have misinterpreted something would he like you to correct their misconception.
You do not know yet that this is not just a typing error
Would SOCA (NCA) be interested in this?
SOCA stands for Serious Organised Crime Agency. The NCA which replaced SOCA also has the same remit. I hardly think that one incident of possible tax evasion by one individual constitutes "Serious Organised Crime" and I don't think the NCA will be interested. They have much bigger fish to catch! I think that a letter to your former client along the lines suggested by mhtax would be sufficient.
It's for the NCA to decide what to investigate. It's not for an accountant subject to MLR reporting obligations to second guess what the NCA might decide to do, and it would be no defence to charge of failing to report a suspicion that the accountant had judged on the balance of probability that the NCA would not investigate the matter.
NCA & HMRC use of Suspicious Activity Reports
The NCA receive over 300,000 Suspicious Activity Reports per year. Over 250,000 of these reports are from banks, a further 20,000 are from money transmitters (such as Western Union), cheque cashers and bureaux de change. About 5,000 reports per year are received from accountants.
The information sent in the SARs goes onto a database known as ELMER where it is accessible to the police, HMRC, DWP (re benefits fraud) and other authorities. Information is retained on ELMER for 6 years.
HMRC have their own systems, including their own IT system known as CONNECT, to examine relevant data and make use of it.
The reports are by no means limited to suspicions of crime which might be described as serious or organised.
There are no de minimis limits in the reporting requirements.
David