Submitting accounts to the taxman. By Nichola Ross Martin

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Nichola Ross Martin takes a pragmatic view of what form of accounts taxpayers should submit to HMRC.

Despite the fact that self-assessment has been with us for over ten years now confusion still arises as to whether and in what format accounts should be submitted to HMRC. It is not surprising, just consider the combinations of requirements imposed:

  • Individuals and partnerships, turnover < 15,000 no accounts required to accompany the SA return, and the results are returned in three boxes.

  • Individuals and partnerships with a turnover > 15,000 no accounts required as main figures are detailed in SA return entries. Balance sheet: optional

  • Partnerships, with a turnover > 15 million, full accounts must be submitted with the return

  • Companies of all sizes must submit accoun...

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26th Sep 2007 17:41

Utterly no point
In sending in accounts.
I cannot understand why accountants cling to these outdated practices. you wouldn't send in a sample invoice with the VAT return to show you knew the correct amount of VAT was applied.
Must be a comfort thing......

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27th Sep 2007 01:06

More is less hassle
Just a quickie......I send lots of information to the HMRC - by letter/ via white space/ PDF and have never had any issues - on the contrary once the letter does manage to hit the right persons desk - the HMRC are on the whole helpful. Balance Sheets - always, always have these - its the only true way you can ensure all the figures agree and everything that is relevant is divulged. The Balance sheet is my first port of call with a client - most enlightening!

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25th Sep 2007 17:58

To submit or not submit
In the case of Sole Traders and Partnerships I always send in a copy of the P&L plus the CA computation with the Return however small the client. I never send a Balance sheet. I was advised (off the record) by an Inspector some years ago that there is no legal requirement to send the Revenue a Balance Sheet; this could give the Revenue a toe-in the door as most of them, necessarily, are contrived through lack of information; also that the P&L would often stave off an enquiry into a Return - especially if the Agent had made an error. As if.......

This Inspector had left the Revenue, set up on his own for a couple of years, and then rejoined so, unusually, he had seen both sides of the coin.

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25th Sep 2007 11:13

Three weeks!
Lucky you Anver, I'm still waiting to hear from and Inspector on an enquiry opened in January....

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25th Sep 2007 14:06

full accounts?
No accounts are required to be submitted - over £15k you need to complete 3.27 to 3.73 but do not send anything else in.

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24th Sep 2007 17:30

SA Balance sheet - not a chance
I have never submitted a balance sheet for self assessment returns neither have I ever been asked for one by any sole trader/small partnership client (most of mine are in this category).
If I did, by the time they go to HMRC they are so out of date as to be totally meaningless from the client's point of view, even if they could understand them.
90% are only interested in one thing, how much tax do I have to pay?
HMRC could take a leaf out of charity commission returns where the submission requirements are related to income.

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By anver
25th Sep 2007 09:26

Olin Case & SAT2 defence
We have a case at the moment where a self-employed IT consultant submitted detailed workings & a P&L with his SA returns.

SA 04 was selected for enquiry. Our review of the SA return clearly shwed he had claimed certain expenses in error e.g. Personal pension premiums as a deduction in the P&L.

The Inspector then wanted to go back and raise assessments for SA03 & SA02. We resisted on the grounds he was out of time. We ended up at Gen Commissioners who passed it onto SC. The inspector sent the file higher up for review & he was told to settle the matter.

He confirmed he would not charge penalties and would only collect the interest & tax for SA 02 & SA 03.

We replied quoting the Olin case and referring to SAT 2 para 4.9 which states that were there is no proof of fraud or negligence and the information was "available to the inspector" then Revenue cannot rely on discovery and are barred from opening an enquiry into earlier years.

Its been three weeks and we have not heard from the Inspector

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