HMRC Enquiry

Personal bank statements

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In an HMRC enquiry - my client has undeclared some income (careless but not deliberate). HMRC have found this out due to the 'exchange of information' . They have requested personal bank statements to prove the amount of income credited to his UK account from this source, which we can do with no problem. My question is can I redact the bank statements so that they show this source of income only and not any other expenses and income. My client has nothing to hide but I feel this could lead to a fishing trip as there are for example transfers of capital to the account from other accounts - and HMRC may start asking questions for proof of such sources, but as they do not relate to their discovery of the underdeclared income, i do not think it necessary to send full statements. Any advice/suggestions to prevent a fishing trip?

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By Accountant A
19th Aug 2019 11:32

Quote:

My question is can I redact the bank statements so that they show this source of income only and not any other expenses and income. My client has nothing to hide ....

Nothing is more likely to make HMRC suspicious than handing over information with entries blanked out.

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By Tax Dragon
19th Aug 2019 11:42

You like redacting stuff, don't you, Anonymous?

Surely in order to demonstrate that all the income received into an account has been identified, you need to provide full statements for that account? How, otherwise, would HMRC know that the redacted part of the statement did not include part of that income? It seems to me that the other entries are thus directly related to the point at issue in the enquiry.

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Lone Wolf
By Lone_Wolf
19th Aug 2019 11:54

Put yourself into the inspectors shoes. If you received the bank statements you requested, with lots of entries redacted, would you be satisfied?

You're probably making things more difficult for yourself in the long run by doing this as they will almost definitely be interested in the background to the redacted payments.

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By Duggimon
19th Aug 2019 12:11

I have no doubt if you sent them the redacted statements the first thing they'd ask for would be the unredacted statements. It's pointless.

All the redacted statements can prove is that the money received from this source is at least what you say it is, not that it is what you say it is.

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Replying to Duggimon:
paddle steamer
By DJKL
19th Aug 2019 12:19

"All the redacted statements can prove is that the money received from this source is at least what you say it is, not that it is what you say it is."

Even with non redacted statements one cannot confirm it is what has been said, all that one can confirm with the bank statements is that through this or that account the amount was £x.

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Replying to DJKL:
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By Tax Dragon
19th Aug 2019 12:22

Indeed. In the absence of a document that sets out the full income (and if such a document exists the omission is starting to sound worse than careless), HMRC is probably entitled to ask for all statements on all accounts.

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