All puns aside, I spoke to a potential client recently with a rather horrendous looking SA account.
The story is rather impressive to say the least and I'd be keen to canvass opinion. Prior to opening his shop in 2015, the client sporadically rented chairs in numerous hairdressers around town and made next to nothing. At the same time he was also making music and practically slumming it on his brother's sofa, apparently making no contribution. For a period of two or three years (which years those are, he can't be sure; but 'maybe 2010 - 2012-ish'?), he didn't work at all and also didn't claim any form of benefit. He was basically being kept by his brother whilst he made music and tried to cut it - some life, eh?
Basically, HMRC have been chasing him, albeit softly, for years and slapped an estimated tax liability of nearly £5k on his account. They've never escalated the debt, never enforced it; only sent a letter to remind him of it each year. He's also never argued the debt as he never wished to make an acknowledgement of it.
Anyway, he submitted his first year SA on his own (no income tax due) and paid his NI bill but he is growing rapidily and making a pretty impressive profit for his second year, as well as making plans to expand - hence the reason I am prepared to consider taking him on.
So what do we think - how do I approach HMRC about this debt if it is either A) under six years old or B) over six years old ? Is it possible it could be contested or is it looking more likely that we'd have to come to an arrangement/submit a return for those years? I'm not sure how we actually prove that he wasn't earning anything or claiming anything unless I try and obtain his bank statements.
It's one I've never come across but there is a lot of promise with him as a client so I'd like to try and help him where I can.
Any help appreciated!