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New job and noticed tax underpayments

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I've started a new job as a financial manager and have come across a couple of tax underpayments, including:

1) No VAT restriction on customer gifts > £50

2) Uniforms provided to staff: logoed tops but unlogoed trousers. No BIK declared in respect of the trousers

There's no suggestion of deliberate evasion, just unawareness of the rules. External accountants have not picked up on either of these items. I'm concerned though that, with the business already facing significant losses this year due to Covid-19, my observations will not go down well at all. Voluntary declarations covering the past 4 year (VAT)/6 years (PAYE) could cost almost £10k.

Anybody else faced this scenario?

 

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RLI
By lionofludesch
15th Aug 2020 16:54

Jeez. That's a lot of trousers and low value gifts.

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By SXGuy
15th Aug 2020 17:05

Bet their loving you already.

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By Paul Crowley
16th Aug 2020 00:12

Who does the VAT?
Who does the PAYE and P11ds?

If these are now your issues to deal with it's a real issue

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By jonharris999
17th Aug 2020 09:54

Presumably we have all been in this position regularly - except for those of us who can say that we never uncover the errors of those who went before us.

I never think that saying nothing is an option, for two reasons:

i) You have to correct the mistakes going forward, on almost all imaginable grounds; and
ii) If there is an inquiry or investigation and you have not said anything, then you are at fault.

I think you are in danger of making someone else's problem your problem.

You have done your job well by noticing this, not badly. Put the problem to your bosses/the Directors. Suggest all the possible courses of action to them. Keep a private note of the meeting. The course of action they choose is up to them.

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By psimonparsons
17th Aug 2020 11:26

Are you providing the trousers for business use or just to dress employees in the latest fashion whilst out clubbing. Would suggest logo has limited relevance. Who owns the clothing?

If it’s uniform, it’s uniform. Same with protective shoes or other elements that a minimum wage inspector would consider to be uniform.

Providing workplace uniform is not a benefit in kind.

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Replying to psimonparsons:
Routemaster image
By tom123
19th Aug 2020 12:50

My service guys get trousers every few months from arco or screwfix.

Never thought to consider bik.

With regard to gifts, what are you giving?

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Replying to tom123:
Hallerud at Easter
By DJKL
19th Aug 2020 13:03

Asda provided the tops (with the logos) but not the trousers when my daughter worked for them whilst doing her Msc.

You maybe have a Wallace & Gromit problem.

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Replying to tom123:
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By Paul Crowley
19th Aug 2020 13:53

Nor would I
But then probably qualfy as protective clothing
NNW rules are that if staff NOT provided with 'uniform' then illegal notional deduction, being the cost incurred by employee to provide.
Spits in the face of the blonde lawyer that'would never wear black' but required by court dress code
Example given in recent webinar on subject was eg. need to wear black shoes

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By dmmarler
20th Aug 2020 14:36

As colleagues say, only address the year in which you are working. Draw the problem to the directors' attention (or whomsoever to whom you report) starting with "The auditors do not seem to have told you ... " setting out how you believe the practice does not seem to conform to requirements. Depending on the relationships, you might like to put it in writing so all the detail is clear. Recommend that the auditors' tax team takes a look to "check your understanding". If they decide they do not want someone who is so clever and you should part company later, then you have a very useful piece of paper to use as ammunition for a decent pay off.

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