A new client came to me today and said she was concerned her 11-12 tax return was wrong, as she thought she had a profit but her SA302 recently requested for mortgage purposes shows nil income.
Her 'accounts' consist of her own spreadsheet of expenses, nothing prepared by the 'accountant'.
The SA100 shows a loss of £83 with no tax paid. Having had a quick look at the return and her 'accounts' I can see the that the CAs were wrong and another expense was wrong (not reduced for personal use), but total errors would result in a profit of around £5-6,000 so below the PA. So, by correcting there would still be no tax to pay.
Am I right in thinking, that
a) As there would be no tax to pay, HMRC could not issue a penalty if we do not correct it as penalties are tax-geared and 100% of £0 extra tax to pay is £nil.
b) If she does not want to correct it, I would have no reason to do an AML report as she has made no criminal gain?
Whilst I agree the best thing to do would be to correct it and have it all 'tidy', it does seem a rather academic exercise and she does not really have the funds to want to pay me to re-do last year. Can I just start afresh with 12-13 and make sure it is 100% spot on?
Am I having a senior moment? Am I missing something here that would make us have to correct it?