Tax Investigation & Change of Accounting Date

Tax Investigation & Change of Accounting Date

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Accounts were produced for the year ended 6 April 2003 and the period 7 April 2003 to 31 March 2004.

The 2004 tax return was submitted electronically with the accounts info. for the period 7 April 2002 to 31 March 2004.

The client has received a Section 9a Notice and we have received a letter saying the return only included the figures for the period 7 April 2003 to 31 March 2004.

We have discovered that the Inland Revenue only receive one set of self employment pages even if more than one is submitted.

The Return has been acknowledged as received.

Do we have to supply this "extra" information because if we don't the Revenue are surely going to find it a little embarrasing to only have half the information they need and (here's hoping) they will drop the investigation?
Hopeful

Replies (5)

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By martinfoley07
01st Aug 2005 21:49

....first check...
....who might be embarrassed by this.

Re-check if you submitted the right info on the tax return when it was filed in the first place. It might be you/client who is embarrased, not HMRC.

You don't give enough info to tell one way or the other, but I worry (from what you do say) if you did submit the right figures on the initial tax return.

Why would you submit more than one self-employment page (if there was one self-employment) for the 2004 tax year return? You do not submit different self-employment pages to go with different accounts periods/years. It's up to you to sort out what are the relevant figures from the different accounts and submit them (on one self-employment page).

Whatever the answer, you should respond in manner which makes the position clear.

Hopeful they might not bother because they asked for wrong year/period? I would not be. Especially if the tax return as submitted was wrong! And especially since business had 7 April year end.

Bon chance, but I suspect you may have a bit of sorting out to do even before you start responding!!

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By User deleted
02nd Aug 2005 09:31

basis periods
Please refer to SAT2 Self Assessment: the legal framework ).

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By Helen Crowley
02nd Aug 2005 14:21

Self-Employment Pages
You are right - details from the accounts for the year ended 6 April 2003 and for the period ended 31/3/04 should both be entered on the 2004 Tax Return. If there were two sets of accounts prepared then you should have completed two sets of Self Employment Pages. Box 3.12 should have been ticked to indicate the change in accounting date. Boxes 3.74 onwards should only be completed on the later set of Self Employment pages. This may be where you have gone wrong. We submit our clients returns electronically and often have more than one set of Self-Employment pages and this doesn't cause any problems. Incidentally you may also have been able to claim Overlap Relief.
It would be a good idea for you (and the other respondents!) to read the Tax Return Guide e.g. Page SEN1 which details the circumstances where more than one set of Self-Employment pages are required. If you don't have a paper copy of the guide you can obtain it from HMRCs website
However assuming that you completed the Return correctly as above, why don't you just send your paper copy of the whole return to the Inspector

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By User deleted
02nd Aug 2005 13:38

Basis periods - where did I go wrong
Accounts
Y/E 06/04/02
Y/E 06/04/03
P/E 31/03/04
Y/E 31/03/05

Basis periods are surely:
07/04/01 to 06/04/02 2003 Return
07/04/02 to 31/03/04 2004 Return
01/04/03 to 31/03/05 2005 Return

or am I missing something?

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By Albasas
03rd Aug 2005 12:15

I Could Have Gotten Away With It If It weren't For You Damn Kids
Sorry, as interesting as all this is, it doesn't really matter what happened- yet! A S9a is a S9a and it would be best if you just cooperated with the Revenue on what is after all a valid enquiry notice from them. End of story.

Possible technical misunderstanding on either you or their, the Revenues part,are likely to be settled quicker if this matter is handled competently. You will now have to prove and explain that the 2 SE schedules were transmitted in this enquiry as is required and either the accounts or the SA2004 return etc are not negligently prepared. It seems unlikely to me that if you have both a year ended 6 April 2003 and 31/03/04 for the same client with 2 different enterprises for SA2004 tax purposes; that the suggested amalgamated accounts submitted, (per your posting) for the period 07/04/02 - 31/03/04 would be either an acceptable format or correct basis period for SA2004 tax purposes.(Older readers will think that this sounds like the old transitional basis for Self Assessment yonks ago 1995-97!) Therefore could someone not have cheated and changed the period to 7/04/03-31/04/04 to allow verification for FBI purposes? Just a thought.

Sorry, but I'm on the Revenue's sides on this one.

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