Share this content
9

Disengaging Client - VAT error

Should I disengage a client who has not demonstrated a VAT error has been corrected?

Didn't find your answer?

Good morning

I discovered whilst preparing a new client's personal tax return that she had not been accounting for VAT on her furnished holiday let property - she is a VAT registered individual.

I explained that the lettings would be a standard rated supply and that she would need to make an adjsutment in her next VAT return (I am only engaged for the SA100) and asked to see a copy of the return where the adjustment is made.

I have now asked a third time and feel that to comply with the 'dealing with errors' code in the PCRT, I should advise her that I will have to disengage as I cannot be certain that the underpaid VAT has been paid over to HMRC.

Does anyone have any thoughts on whether it is a requirement that I see a copy of the adjustment (in truth I am likely to disengage either way as I am uncomfortable that she is not cooperating, but before I put in writing that I will need to as she hasn't shown me a copy of the correcting return I thought I would seek opinions on that aspect).

As ever, many thanks in advance of any answers.

Ellab

 

Replies (9)

Please login or register to join the discussion.

avatar
By JDBENJAMIN
03rd Dec 2019 09:40

If she is being evasive, you can bet she hasn't done it. I think you're right to disengage.

Thanks (2)
avatar
By bernard michael
03rd Dec 2019 09:55

How big is the VAT error ??

Thanks (0)
Replying to bernard michael:
avatar
By EllaB
03rd Dec 2019 11:59

Over £1,000...

Thanks (0)
avatar
By the_drookit_dug
03rd Dec 2019 10:00

Technically, I don't think you are required to follow up to make sure the adjustment has been done. However, you clearly suspect that she has not corrected the error so are correct to look to disengage, and also consider your ML obligations.

It's frustrating that so many people have such a blasé attitude to tax compliance, almost seeing it as a choice. Don't they realise that it's criminal?

Thanks (1)
Replying to the_drookit_dug:
avatar
By EllaB
03rd Dec 2019 12:02

It's a bit 'grey' reading the PCRT. If I was engaged to do the VAT returns I would have to ensure it was corrected or disengage.

It's a mute point really as I'm almost definitely disengaging anyway but I don't want to quote that I must see the correction if I don't have to, as she will likely kick off.

Thanks (0)
Replying to EllaB:
Hallerud at Easter
By DJKL
03rd Dec 2019 12:09

Moot not mute, it comes from a moot being a meeting (poss Scandinavian). Just think Lord of the Rings and the Entmoot in same. (The meeting of the Ents when matters are discussed, hence a debatable point=moot)

Edit- may actually be more Anglo Saxon having now looked it up.

https://en.wiktionary.org/wiki/moot

Thanks (1)
Replying to EllaB:
avatar
By the_drookit_dug
03rd Dec 2019 12:19

As you are not engaged to deal with VAT, were it not for your overall suspicions, I would consider a follow up email to her checking that it had been dealt with would possibly be acceptable if the response were yes.

Thanks (0)
avatar
By bernard michael
03rd Dec 2019 12:07

How many VAT returns are involved ? Is there an ongoing course of action

Thanks (0)
avatar
By Roland195
03rd Dec 2019 20:44

The VAT due in this case is a pure technicality based on the fact your client also happens to have a VAT registered sole trade. It's not like this money had been charged to her customers and therefore sitting in her current account ready to hand over to HMRC so I'd suggest you could perhaps cut her some slack on the less than urgent response to what was undoubtedly unwelcome news. Assuming you have already considered any input VAT she could recover and she still proves resistant to the idea of correcting the omission, I'd think a AML report would be required but can't see that this extends to disengagement - we would have few clients left holding them to these standards. Of course, if you already feel the client is a PITA, then crack on.

Thanks (0)
Share this content