A client has two limited companies. He issued an inflated invoice for services from one to the other, to reduce the profits on the larger company. He then failed to declare the invoice on the smaller company. When pointed out to him, he asked us to 'lose' this rather large sum of money, which we explained isn't possible. Time has passed and we are almost certain that the income has never been declared, in addition to other suspicious activity.
Fortunately, we've never had any clients behave this way before, but for that reason we want to clarify a few things before taking any further steps.
- We feel obligated to report this. Are we correct to do so or is it complicated by any form of client confidentiality?
- Where do we report this? An SAR to the NCA or just a tax evasion report to HMRC?
Any help would be greatly appreciated.