Client has not submitted tax returns for years paying on estimated demands only. Earnt about £45K each year for past 4 years. I did accounts for one year only and submitted the 2011 return.
Problem is that he has not worked since April 2011 and will not be working again as he has cancer and he wont live long.
He wants to bring tax up to date I think not for any 'moral' reasons but he has an insurance policy that will only pay out on his death if his tax is up to date. Catch 22 = in overdraft therefore cant pay the £10K or so tax bill but until he pays the policy wont pay on death. No bank will lend him the money obviously.
Rang HMRC and they said to write a letter telling above and promised a reply turnround in 3 weeks.
Question... do you think HMRC will ask for the past returns to be completed?
And will they want the money ?
Will the money have to come from his estate (which is now only 1/2 of his house)?
I've not said anything to him about paying the tax as yet - but will HMRC want to put a charge on his house/get wife to sell etc etc?
Client has only received tax bill for the 2011 year.
Any suggestions as to what I should put in the letter?