No Tax Returns filed for last 8 years

No Tax Returns filed for last 8 years

Didn't find your answer?

I have a client who has not filed a tax return since 2005.  I have extracted all of the information from him (as best I can) and prepared tax returns for the last 7 years.  He does owe tax for all of the years.

I am aware that the filing window (of 4 years) has now closed.  His SA online file with HMRC shows the 7 years returns outstanding but also says that the returns are now out of date and cannot be submitted.  However I believe he still needs to notify HMRC of his liability for the out of date years and if he does not HMRC will presumably issue discovery assessments.  Am I correct in my thinking on this and should I go ahead and submit paper returns for the out of date years anyway?

Replies (9)

Please login or register to join the discussion.

avatar
By angel
03rd Sep 2013 19:17

I would
I've had a few like this and think its best to file all years so clients completely up to date best time with tax return campaign deadlines 15th oct to get in though

Thanks (0)
avatar
By Rachel123
07th Sep 2013 22:41

I'm working with a client in a similar situation to this. You can phone the tax return catch up campaign helpline - see link below.

http://www.hmrc.gov.uk/campaigns/mtrc.htm

I'm still not sure about time limits though and don't understand at what point HMRC would issue a discovery assessment - my clients outstanding returns date back to 2005. 

 

 

Thanks (0)
avatar
By thehaggis
08th Sep 2013 00:26

There is no time limit for sending in a return, but there is a 4 year assessing time limit. That means you cannot self assess.

HMRC will need to issue discovery assessments for any year older than 4 years.  Failing to send a return in on time is almost certainly careless, so they can assess a further two years.  However, they need to be able to prove deliberate behaviour before they can assess any more years.

Thanks (0)
Replying to legerman:
avatar
By reilloc
08th Sep 2013 07:37

Deliberate Behaviour

thehaggis wrote:

There is no time limit for sending in a return, but there is a 4 year assessing time limit. That means you cannot self assess.

HMRC will need to issue discovery assessments for any year older than 4 years.  Failing to send a return in on time is almost certainly careless, so they can assess a further two years.  However, they need to be able to prove deliberate behaviour before they can assess any more years.

I think they'd argue that failure for 8 years (when presumably returns were filed previously) was deliberate behaviour!

Thanks (0)
Replying to Chris Astle:
avatar
By thehaggis
08th Sep 2013 18:14

Prove It!

reilloc wrote:
 I think they'd argue that failure for 8 years (when presumably returns were filed previously) was deliberate behaviour!

They can argue whatever they want. Its what they can prove that counts.

Thanks (0)
avatar
By MarionMorrison
08th Sep 2013 08:21

Within range

Chatting to the catch-up guys (nice folk actually) they said you can online file 2009/10 onwards without much thought other than your registration with them for those years.  For 2008/09 you can file a physical copy of the return and figures will be accepted and repaid/charged.  For years earlier than that, again it has to be physical returns but they'll only act on the submitted figures if they show that tax is owed.  A repayment that would have been paid for 2007/08 is gone and lost. 

Thanks (0)
avatar
By Rachel123
09th Sep 2013 13:38

I've just spoken to the tax return catch up helpline. The lady told me that for tax years up to 5 April 2009 they would not now raise discovery assessments as the time limit has passed and that although we can file tax returns if we want to we don't have to. This is good news for me and my client but does anyone have any thoughts as to whether she is correct?

 

 

Thanks (0)
avatar
By thehaggis
09th Sep 2013 19:16

Lucky You

Since the lady you spoke with would know nothing about your client's unassessed tax liabilities, I doubt very much she was correct to say that HMRC would not want to issue discovery assessments.  The time limit for discovery assessments is 20 year (depending on behaviour) so she was not correct to say the time limit had passed.

It boils down to what their standing instruction is.  Your call is likely to have been recorded, so at least you have comfort that she said you don't need to submit tax returns.

If you submit a return fir an earlier year and there is a tax liability, they are likely to assess - depending on the amount due.

If you don't submit the earlier returns, they are likely to risk assess whether there is sufficient tax at stake for the earlier years to warrant compliance activity.

Thanks (0)
avatar
By billgilcom
09th Sep 2013 20:05

If you don't submit the earlier years

In each campaign some cases will be selected for scrutiny so that filing for only a certain number of years when tax returns are shown as outstanding for many more might just bring your clients failures under more scrutiny. THEN, what would an outside impartial judge say as to whether the failure to submit the earlier tax years when you clearly knew that there was (possibly) material amounts due was other than deliberate (and potentially concealed). They can argue what they want but further failures can also be seen as merely confirming their initial prejudgement that all carelessness is deliberate - especially if it is the only way they can get it assessed - and even after the client was caught with his/her trousers down it was concealed. Potentially the "crooked agents" scenario might come on the scene if it was seen to be intentional and especially if you did not give the exact amounts of the tax lost to any HMRC officer that you asked the simple question regarding need to file. Remember the officers you speak to may not be experienced in terms of investigation work and may merely process returned documents leaving the examination/scrutiny of the disclosures to experienced managers or investigators. In talking to the Campaign adviser I would imagine that anybody wishing to rely on an HMRC officers decision as to whether tax return would be needed would have said right upfront that so much tax was due for these years - if not then what reliance can be placed on such a decision made without all the facts - irrespective of whether the officer should have asked such a pertinent question before making the decision. 

Thanks (0)