As part of an ongoing check by HMRC into Mr Bloggs having his 2015-16 tax return investigated, they have now asked for his wife's bank statements, do I need to provide them as she isn't being investigated or do the circumstances mean they have every right to ask for them? Just looking for opinions on if I should fight my corner and say no or provide them as they are a valid request and saying no will cause further issues as HMRC have pretty much issued a threat to us?
Mr Bloggs is having his 2015-16 tax return checked by HMRC. Self employed barber for most of the year and incorporated towards end of tax year. He had a disgruntled ex employee who was married to somebody at HMRC so this is why we think this has come up. I believe they suspect he has additional income not declared as it is a largely cash business.
We've given them all of Mr Blogg's bank statements, paypal statements, all business receipts, invoices, explanations on many of the income and expenses, and a household spending summary. Mr bloggs doesn't have the best records for the daily customers he has but deposits caash takings to his bank weekly and has receipts for cash expenses.
Mrs Bloggs also works as a barber in the shop. She suffers from a number of mental health issues, including depression, bipolar, anxiety and is also dyslexic. I must admit HMRC have been very understanding of her condition when dealing with them for her in the past.
Because of her conditions, Mr Bloggs puts all the shop takings through his personal bank account (no seperate business account) and generally manages the shop and household money from this account. The total of the shop takings and expenses were then split between Mr and Mrs Bloggs for their tax returns.
The full bank statements and calculations to support how amounts were split have already been provided to HMRC.
There were 4 transactions in the year from Mr Bloggs to Mrs Bloggs all around £200.
This set up was done by the old accountant, since coming to us they went limited and it's all a bit tidier now.
HMRC asked for Mrs Bloggs bank statements because of the transactions between Mr and Mrs Bloggs. We responded saying all transactions between them are covered by bank statements already provided. They then called us and threatened us by saying if did not provide her statements they would open an investigation into her and also pass details to corporation tax to investigatethe the company. It was a threat and we said this to them to be told "that is not how we operate" and then repeated the threat.
We haven't seen her bank statements yet.
Any helpful opinions appreciated. Thank you.