Money laundering & tax returns

Money laundering & tax returns

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My basic presumption is that on 1 Mar 04 we will NOT be making STR's on all clients who have not filed a 2002/3 Tax Return, as this is a civil not criminal offence.

On 1 Mar 04 Mr X comes to see us:

IR had been correctly notified of Mr X sources of income and have issued Tax Returns.

But he has not filed Tax Returns for say 4 years.

IR have issued £100 fines, Determinations, surcharges etc (and all have been paid) and are generally on his case with phone calls, letters etc.

Mr X wants you to bring his Tax Returns up to date. You see that he has brought you everything except the proverbial "50p interest" on the joint bank account he did not realise he had to bring.

Your mental arithmetic tells you that for at least 1 tax year, the amount of tax determined is lower than the amount of tax due.

Is Mr x reportable to NCIS? I think yes as he has enjoyed not paying the tax by not declaring income/expenses.

But why is this different to reporting all non 2002/3'ers on 1 Mar? They have 'underdeclared income' by not submitting a tax return.

Many thanks in advance

Shaun Spalding

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By Abacjm
24th Feb 2004 01:29

Getting Up to date
Shaun,
I should concentrate on getting Mr X's tax affairs up to date and getting the determinations, penalties etc overturned by the submission of the 4 years tax returns, including the 50p interest on the deposit account, rather than worry about MLR that has not come into force yet.
The whole MLR thing is going to cause havoc, with practitioners wondering (and possibly trying to preotect their own practice) whether or not there is an obligation on them to report very minor breaches of accountability. What will happen then is that local offices will get bogged down and the real culprits will escape as their A/cs etc are "signed" by one of the Big 5 (maybe 4 now).
If the Govt and the Revenue want policemen to snoop on clients, let them pay for the privilege.
If the Revenue withhold a tax repayment unduly, should they be reported to the Courts? It can work both ways!

As for Mr X "enjoying not paying the tax by not declaring income/expenses" please be re-assured that any tax subsequently found to be due will carry interest and surcharges, so he has not escaped.

Also remember there are no prizes to be won for the practice who reports the first or most clients.
However, if Mr X suddenly faxed you from Jamaica, saying that he has made a "hash" of all his tax affairs and sounds a bit "dopey,man" then you may have a case.

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