We need to amend a 2021 tax return any way to do i

Bookeeper made major mistakes only now coming to light

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In 2020/2021 client was using credit cards to buy materials for business during covid and the bookeeper was not putting the materials thriugh the acocunts. Payments to the credit card were being treated as dividends.

Therefore the dividends are much higher than they should be?

I know normally we can't amend a 2021 tax return. Is there any way we can?

Replies (9)

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DougScott
By Dougscott
29th Apr 2024 15:30

You can amend that years assessment by writing to HMRC with full details and the corrections required. Bear in mind you may need to provide evidence of income, expenditure, dividend certificates, etc

You should also get the corporation tax assessment amended to as presumably the company profits have been overstated. Again write to the CT office with details.

But be 100% sure of your facts - you may open a can of worms where HMRC decide to look at the records of the company and the client and if the bookkeeper made that kind of mistake chances are they have made many more.

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By 0098087
29th Apr 2024 15:41

Thank you. We do have credit card statement going back there which will prove business expenditure but I appreciate what you say about a can of worms.

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By David Ex
29th Apr 2024 16:06

Maybe also suggest the client familiarise themselves with their legal obligations as a company director.

https://www.gov.uk/running-a-limited-company/company-and-accounting-records

“You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records.”

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Replying to David Ex:
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By Roland195
30th Apr 2024 10:20

From the facts outlined, it seems a fairly simple book-keeping error - The client used personal credit cards to fund business purchases and the book-keeper either didn't think to ask or wasn't told.

We aren't told the amounts, so can't comment if the resulting accounts were materially misstated.

I can't see how you get to £3k of fines or disqualification from that (If at all - never encountered it in the real world).

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By 0098087
29th Apr 2024 16:14

They did but the Bookeeper screwed up

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Replying to 0098087:
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By David Ex
29th Apr 2024 16:33

0098087 wrote:

They did but the Bookeeper screwed up

You can delegate authority but not accountability. Who approved the company accounts?

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By Paul Crowley
29th Apr 2024 18:09

The person prepared the accounts and did not ask questions?
Does client usually treat the credit card as personal money?
Is the bookkeeper still bookkeeping?

I would be concerned that it took 3 years to be noticed by all parties, but provided it is all genuine then it is going to good old paper and envelopes to fix.

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paddle steamer
By DJKL
29th Apr 2024 18:39

Where are they re the vat should also be considered.

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By lesley.barnes
30th Apr 2024 09:45

Tread carefully. Are you sure that the materials were part of the business if they were purchased during Covid? The client didn't do any home improvements whilst they were in lockdown? You've got the credit card statements have you got the receipts for the purchases and checked them? Did the client have sales into the company during lockdown? Why did they use a personal credit card? No job retention scheme claims? I would be suspicious that this has just come to light. Presumably the materials didn't go through the company accounts if the book keeper made a mistake? You've could have other issues as well as self assessment - VAT on the materials, Corporation Tax, Directors Loan account? Lots of opportunities for questions from HMRC.

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