I am thinking of submitting immediately amended Tax Return incorporating the capital gains tax information and would advise the client to pay the increased tax liability immediately. Any penalties interest assessed should appear in SA account and would also be paid.
I would then try to resolve the Capital Gains Tax Report via calling HMRC for advice on which options to proceed.
My aim is to ensure client lodged submission of this late declaration and pays other the outstanding CGT liabilities asap. The penalties and interest should then crystallised and I can then try to resolve the 'red tape' at a later stage.
Do you think this is a good plan?
Unfortunately, as the 2021/22 SA tax return has been submitted, the CGT reporting system do not allow the submission of the return.
One of the question in the system was 'have you submitted SA return'? and if yes, it stopped further progress and ask me to contact HMRC to obtain written form from them. Knowing how difficult it is to contact HMRC by phone, I really dread doing this. Would you have any idea what else I can do?
Thanks Jason and everyone else for your comments and contributions. It has been most helpful.
Again, I must apologies for my incomplete information which caused a bit of misunderstanding. I took over the client who hasn't done much since lockdown. The directors were new to the VAT implications. There were only a few sales invoices issued and all of them were issued with VAT charged. There were no VAT number stated on these invoices. There was never the intention of fraud. The directors thought all invoices must be issued supposedly with VAT to be charged. They were not aware that because they have issued the invoices + VAT, they would need to register for VAT (as they thought their threshold is way below the limit).
I have since advised them of the problems involved.
I intend to backdate the registration, declare all sales invoices and claim any cost/ expenses invoices. This would at least mitigate the errors and bring everything up to date.
My worry was on whether any penalties would be levied. Jason has include comments on this for which I am grateful.
I would go with backdating the registration and incorporating all transactions in one return to clear the errors. Do you think this is the best option?
Many thanks
I must sincerely apologies for the misunderstanding. The reason for my backdating on the voluntary registration is to put everything right.
The client company did the invoice just before lockdown last year and the directors were not aware of the implications of issuing the invoice without registering for VAT. To put everything right, I intend to backdate the registration and include all sales invoices (declaring the output vat of all sales) and claiming any input vat on supplies and expenses. Do you think this will help correct the errors?
My only concern was whether this would cause an inquiry from VAT office and if any penalties would be due and if so, the 'quantum' of these.
Hi Les,
Thanks for your response.
Would there be any penalties on the output VAT wrongly charged on invoices?
I am trying to correct the error made by the client and declared all output vat and at the same time, claimed any relevant input vat within this long vat period.
Or do you think it would be better to 'let sleeping dogs lie' as suggested by other contributor..
Hi,
Thanks for your response.
I thought for Tronc to apply, it must be separate from the company's PAYE scheme in order to obtain exemption from NIC contbns.
My answers
Many thanks, Richard for your advice.
Hi Wanderer,
Thanks for your advice.
I am thinking of submitting immediately amended Tax Return incorporating the capital gains tax information and would advise the client to pay the increased tax liability immediately. Any penalties interest assessed should appear in SA account and would also be paid.
I would then try to resolve the Capital Gains Tax Report via calling HMRC for advice on which options to proceed.
My aim is to ensure client lodged submission of this late declaration and pays other the outstanding CGT liabilities asap. The penalties and interest should then crystallised and I can then try to resolve the 'red tape' at a later stage.
Do you think this is a good plan?
Hi Wanderer,
Unfortunately, as the 2021/22 SA tax return has been submitted, the CGT reporting system do not allow the submission of the return.
One of the question in the system was 'have you submitted SA return'? and if yes, it stopped further progress and ask me to contact HMRC to obtain written form from them. Knowing how difficult it is to contact HMRC by phone, I really dread doing this. Would you have any idea what else I can do?
Hi,
Thanks for your contribution and advice.
Should the CGT payment be made via SA payments?
How do I go about submitting the CGT under the CGT reporting account?
Thanks
Thanks Jason and everyone else for your comments and contributions. It has been most helpful.
Again, I must apologies for my incomplete information which caused a bit of misunderstanding. I took over the client who hasn't done much since lockdown. The directors were new to the VAT implications. There were only a few sales invoices issued and all of them were issued with VAT charged. There were no VAT number stated on these invoices. There was never the intention of fraud. The directors thought all invoices must be issued supposedly with VAT to be charged. They were not aware that because they have issued the invoices + VAT, they would need to register for VAT (as they thought their threshold is way below the limit).
I have since advised them of the problems involved.
I intend to backdate the registration, declare all sales invoices and claim any cost/ expenses invoices. This would at least mitigate the errors and bring everything up to date.
My worry was on whether any penalties would be levied. Jason has include comments on this for which I am grateful.
I would go with backdating the registration and incorporating all transactions in one return to clear the errors. Do you think this is the best option?
Many thanks
I must sincerely apologies for the misunderstanding. The reason for my backdating on the voluntary registration is to put everything right.
The client company did the invoice just before lockdown last year and the directors were not aware of the implications of issuing the invoice without registering for VAT. To put everything right, I intend to backdate the registration and include all sales invoices (declaring the output vat of all sales) and claiming any input vat on supplies and expenses. Do you think this will help correct the errors?
My only concern was whether this would cause an inquiry from VAT office and if any penalties would be due and if so, the 'quantum' of these.
Hi Les,
Thanks for your response.
Would there be any penalties on the output VAT wrongly charged on invoices?
I am trying to correct the error made by the client and declared all output vat and at the same time, claimed any relevant input vat within this long vat period.
Or do you think it would be better to 'let sleeping dogs lie' as suggested by other contributor..
Hi,
Thanks for your response.
I thought for Tronc to apply, it must be separate from the company's PAYE scheme in order to obtain exemption from NIC contbns.
Is this correct?
HI John,
Noted from thread above that you have used your system to submit. Can you tell me what system you used and was this resolved?
Can you also advise me what the technical solutions are? Really appreciate your help in sharing your experience in this matter.
Many thanks
Oh dear, can you tell me how you resolve this? Did you submit the VAT return manually?
I knew that this was a very old period but was mainly due to the company being closed most of the pandemic period.
Would be grateful if you can share your experience on how to resolve this.
Many thanks