Agreed. I can do DIY, but I choose to work harder, earn some more money, and pay someone to do it for me! 1) Because I hate DIY :D, and 2) because the professionals invariably do a better job than the amateurs and are usually more willing to fix things if it goes wrong! ;) (And my DIY invariably does!)
If you send me your full name and address, professional qualifications, telephone number, bank details and mother's maiden name, I might be able to help you with it!
If you leave it alone, and time runs out, you'll be better off and I won't make any money off you!
The OP doesn't say whether a PAYE scheme has been set up. If not, and the directors want to benefit from the "free" Class 1 NI credits, this will need to be established prior to the 31 March 2012!
I agree with the year end date anomaly too. 31 March will be the year end (unless deliberately changed to 3 March) and two Tax Returns will be required, but only if the trade started before 1 April following the incorporation, otherwise the trade would only be carried on for less than 1 year and therefore 1 Tax Return would be sufficient.
I also reiterate acquiring the services of a good accountant, no matter how clued up the OP is. There are too many pitfalls for people in business without the "specialist" knowledge that our profession has.
A few years ago I represented a friend, who was a self employed plumber, in a back duty case - he had failed to register as self-employed or make a tax return for 6 years and had been "found out" by the Revenue!
Having prepared accounts from scratch - a big box of "bits of paper" and bank statements, we were "invited" to a meeting with the Inspector to discuss the investigation.
We duly turned up at the meeting, and the Inspector immediately said "I have a colleague sitting in to record the meeting by taking notes of what has been said."
I immediately countered by saying "I have no colleague, but with your permission I will record the meeting!" and promptly took out a hand held tape recorder and set it going! There was a look of surprise from both revenue Inspectors at that, but they could hardly complain!
The meeting lasted for over 2 hours and I had to change tapes at least twice. The Inspectors were very well behaved and very courteous during the whole meeting, and my client got a good result with less than expected penalties due to our "efficient handling of the investigation"!
Following the meeting I typed up the notes and sent a copy to the Inspector, for his approval, and I also kept the tapes for a number of years, just in case!
I do wonder however, how courteous and friendly the whole thing would have been if I had not had that tape recorder with me!
Was the previous owner a member of one of the professional accountancy bodies?
If I have this right, you have to continue to pay PII for 2 years after ceasing practice, if indeed they have ceased, and thus anything which arose during the previous owners time should be covered by the 2 year "run-off" period.
At least, that's how I understand it, although I'm not an insurance or legal expert, just a person who has to pay PII himself.
If there are "missing receipts" or unclaimed expenditure on behalf of the business, why not discuss it with the client and then get them to sign a "LoR" stating the amounts they consider reasonable. That way there is a trail and the client is taking full responsibility for the "estimates".
Is the client VAT registered? If so you should put in a defensive "admission of guilt" backside covering declaration of error letter showing the omissions and making the retrospective VAT adjustment.
However, otherwise I'd just include immaterial adjustments in the current year.
What really irritates me about this sort of thing is that there are some people who do this time and time again (setup companies, trade, collect VAT, PAYE, Employers NI, Employees NI) and then simply pocket the money, fail to submit any returns and then get struck off by Companies House without HMRC even batting an eyelid.
There's something dreadfully wrong with the UK nowadays.
This goes back to my "rant" in a previous question against someone just closing a company because they couldn't afford to meet their debts!
OK, I may have picked on a genuine case there, but this happens so often and with such impunity that one has to ask "When will it be stopped?"
There seems to be an attitude of "couldn't care less" against these crooks, and that everyone expects people to "cheat the system" wherever they can, whether it be closing a company to write off debts and re-opening another to continue doing the same thing again, cheating on benefits or just plain thieving!
What this country needs IS a "Spanish Inquisiton" with some power and punishment factors which are relative to the crimes! If someone repeatedly cheats the system then the system should take back repeatedly what that person owns etc etc. Make them work to repay the country what they've cheated out of it. Compulsory work orders, boot camps etc spring to mind!
Hmmm, maybe I've strayed into another "rant" here!
We are going to interview the potential client again and see what exactly he wants out of this situation and see how much he understands of what has or has not been done in the past.
My answers
Agreed. I can do DIY, but I choose to work harder, earn some more money, and pay someone to do it for me! 1) Because I hate DIY :D, and 2) because the professionals invariably do a better job than the amateurs and are usually more willing to fix things if it goes wrong! ;) (And my DIY invariably does!)
This may be a serious problem.
If you send me your full name and address, professional qualifications, telephone number, bank details and mother's maiden name, I might be able to help you with it!
If you leave it alone, and time runs out, you'll be better off and I won't make any money off you!
;)
The OP doesn't say whether a PAYE scheme has been set up. If not, and the directors want to benefit from the "free" Class 1 NI credits, this will need to be established prior to the 31 March 2012!
I agree with the year end date anomaly too. 31 March will be the year end (unless deliberately changed to 3 March) and two Tax Returns will be required, but only if the trade started before 1 April following the incorporation, otherwise the trade would only be carried on for less than 1 year and therefore 1 Tax Return would be sufficient.
I also reiterate acquiring the services of a good accountant, no matter how clued up the OP is. There are too many pitfalls for people in business without the "specialist" knowledge that our profession has.
Taping interviews!
A few years ago I represented a friend, who was a self employed plumber, in a back duty case - he had failed to register as self-employed or make a tax return for 6 years and had been "found out" by the Revenue!
Having prepared accounts from scratch - a big box of "bits of paper" and bank statements, we were "invited" to a meeting with the Inspector to discuss the investigation.
We duly turned up at the meeting, and the Inspector immediately said "I have a colleague sitting in to record the meeting by taking notes of what has been said."
I immediately countered by saying "I have no colleague, but with your permission I will record the meeting!" and promptly took out a hand held tape recorder and set it going! There was a look of surprise from both revenue Inspectors at that, but they could hardly complain!
The meeting lasted for over 2 hours and I had to change tapes at least twice. The Inspectors were very well behaved and very courteous during the whole meeting, and my client got a good result with less than expected penalties due to our "efficient handling of the investigation"!
Following the meeting I typed up the notes and sent a copy to the Inspector, for his approval, and I also kept the tapes for a number of years, just in case!
I do wonder however, how courteous and friendly the whole thing would have been if I had not had that tape recorder with me!
IT Dinosaur
I always thought that they were part of a "Magic Eye" poster and I've been squinting madly trying to see a 3-D image!
;)
PII
Was the previous owner a member of one of the professional accountancy bodies?
If I have this right, you have to continue to pay PII for 2 years after ceasing practice, if indeed they have ceased, and thus anything which arose during the previous owners time should be covered by the 2 year "run-off" period.
At least, that's how I understand it, although I'm not an insurance or legal expert, just a person who has to pay PII himself.
Letter of representation
If there are "missing receipts" or unclaimed expenditure on behalf of the business, why not discuss it with the client and then get them to sign a "LoR" stating the amounts they consider reasonable. That way there is a trail and the client is taking full responsibility for the "estimates".
VAT?
Is the client VAT registered? If so you should put in a defensive "admission of guilt" backside covering declaration of error letter showing the omissions and making the retrospective VAT adjustment.
However, otherwise I'd just include immaterial adjustments in the current year.
Mini rant?
This goes back to my "rant" in a previous question against someone just closing a company because they couldn't afford to meet their debts!
OK, I may have picked on a genuine case there, but this happens so often and with such impunity that one has to ask "When will it be stopped?"
There seems to be an attitude of "couldn't care less" against these crooks, and that everyone expects people to "cheat the system" wherever they can, whether it be closing a company to write off debts and re-opening another to continue doing the same thing again, cheating on benefits or just plain thieving!
What this country needs IS a "Spanish Inquisiton" with some power and punishment factors which are relative to the crimes! If someone repeatedly cheats the system then the system should take back repeatedly what that person owns etc etc. Make them work to repay the country what they've cheated out of it. Compulsory work orders, boot camps etc spring to mind!
Hmmm, maybe I've strayed into another "rant" here!
Oh well...
Thanks
I appreciate the responses so far.
We are going to interview the potential client again and see what exactly he wants out of this situation and see how much he understands of what has or has not been done in the past.
We'll definitely consider the advice above.