Thank you Accountant A for your constructive input. I have tried this but the ones I have used just blow smoke up my a** which does not translate into interviews. I'll reach out to more specialist ones and hopefully get the desired results.
andy.partridge and Tim Vine thank you for responding.
Thank you for your input.
I have been of value to employers due to me getting the work done in time and to required standard. I have had some ideas relating to workflow, (e.g) keeping all client passwords in one password protected spreadsheet, using pdf software to complete HMRC forms in a more professional looking way etc but these are really clutching at straws.
For clients,well I have corrected errors relating to VAT compliance, capital allowances that ahve gone on for years and missed by others but these have increase tax liability for the client so it is not really an achievement.
I'm not sure what your background is but you must be aware that in some practices you're not far off being a robot.
Company is trading. He was initially a sole trader but incorporated in October 2015.
I guess I just need to see the full accounts really.
I don't understand the mentality of people who see a question and actually take the time to write a mocking response. What are your adding to the topic? It was a stupid question but it is not the only stupid question on AW.
I get it. You can take every penny in dividends as long as you have the reserves. Was thrown because I've never seen it but really should have remembered the principle.
Thank you all for your responses.
A salary of £2,800 was paid officially. 10 payments of £280 with the reference salary on the bank. The rest of the money was withdrawn from ATM or used to pay for personal expenses.
He was paid £2000 in February and £2000 in March (Awaiting P60 details to see tax deducted) so total for tax year to declare is £6,800
Thank you all for your replies. I've tried to answer everything at once. I hope this is readable.
When you say "they" have no record ... etc., do you mean HMRC or the previous accountants? If you mean HMRC, what do the previous accountants say?
When I say they I mean HMRC. Re the client, the person dealing with the accounts died in March. My client will be calling the company today to find out what happened.
Was tax accrued in the accounts? What does the client say about how this happened?
When you say surplus do you mean profit and why do you use this word, are you sure it is trading?
No tax has ever been accrued in the accounts. The client is one of those whose knows absolutely nothing about these accounts. Just handed over bank statements and left it at that. By surplus I mean profit. The accountants used a charity format (restricted/unrestricted funds etc) to do the accounts even though company is not a charity.
Is it a charity?
The company is a Community Interest Company limited by shares. I believe the accountants have confused this with a charity because one of the notes of the accounts said ‘XXXX is a Community Interest Company and does not have a share capital’. It actually has share capital of 100.
Go back to the Client and explain how you are going to get them compliant and keep them compliant. How they got there is to some extent irrelevant; it is what you do now that matters. Do whatever you believe is necessary to confirm the closing Balance Sheet ( at whatever date appropriate ) is accurate and review prior years if you feel a need to. If, as has been suggested, the Company is also a registered Charity then make sure the accounts are also filed at the Charity Commission, along with the appropriate external independent examination or audit certificate, and is compliant with the relevant Statement of Recomended Practice for Charities. Even charitable companies have to file a corporation tax return (simplified version), unless HMRC notify otherwise. Complete the appropriate tax returns and get them filed. Once you have established any tax liability that may be due then that is a discussion with the directors in due course. A courtesy phone call to HMRC when you know the score might be a consideration.
That's pretty much what I did for a client; you didn't get them into the mess but you can get them out of it. Any tax liabilities or penalties are an inevitable consequence - the sooner you know the earlier you can tackle it.
Best of luck.
Thank you. I’ve hinted at this to the client already. After all the director is ultimately responsible.
You haven't said what the company does. Are you certain that it is required to submit a Company Tax Return?
It is 100% required to submit corporation tax return. They are a company that works to empower young people. They really should be a charity as it has charitable objects but I think the client got confused about the benefit of being a CIC. As far as I see there are no benefits but that’s another discussion.
You mention surplus...its not a service charge set of accounts is it?
No. CIC limited by shares working in education/youth field
Thank you for the response.
The client has made losses in most years but in the first 2 years it made surplus of £1,182 and £3,817. There is no evidence of any capital expenditure from the accounts so I have to assume a liability of £236.40 and £763.40 respectively.
Do you think there is a chance that HMRC could 'forgive' the fines if my client settles the outstanding tax liability. I'm pretty confident that I know the answer to that but I have to have hope.
This is really upsetting. I don't like to insult other professionals but this is ABC stuff. File accounts then file tax returns. If you can't get that right then you are dangerous.
Thank you for your responses
It is a van, not a car. Sorry about that. Silly error to make.
I now understand how it all works. Thank you so much for your prompt replies.