2 Years Tax Returns Possibly Not Submitted

sarah_elton

I wouldn't bother with an accountant if we're talking small sums of profit. Unless it's his main income it's probably not worth the cost of the accountant.

Honestly, HMRC's helplines are very helpful, and for someone with small profits/losses they're not going to be in big trouble. Say you've just realised and aren't sure what to do. It'll be fine.

I told them I was self-employed about 6 months after starting (I was only doing some freelance writing in my spare time and assumed stupidly that I didn't have to tell them till the following April). They said they were sorry, but I'd have to pay a £100 fine for not registering within three months. But they were nice about it.

As others have said, if he made a loss in the first year that can be offset against profit in the second year, so his profit that he hasn't paid tax on will be even smaller.

Just call them and be honest. What other's have said is right.

Kool_Katty

Above seems ok - he is a bit scared.

Showed him this thread and he contacted an accountant who said he would prepare the accounts for 05/06, 06/07 & submit the new ones for 07/08 for £125 each ( total £375 )

Do you think it would be simpler and cheaper just to telephone the tax office?

Kool_Katty

Any ideas? Go and pay the accountant or phone HMRC?

m1ntie

He will still have penalties to pay for late submission - even if he is showing a loss.

mrs_deadline

He should start by getting every scrap of paperwork together to complete this year's return. That way he'll know what's needed to justify his losses or profits from the two previous years.

He then needs to get all the paperwork together for those years, whatever it takes! Hope he has good enough records to prove the first year losses, which strikes me as the tricky part. Whether he goes to an accountant or whether he calls the helpline, he'll have to have proper records (or give that impression over the phone).

If this is something he'll put off, it's best to get the accountant straight onto it so that the figures for all years are in order before the first return goes in.

Needless to say, I wouldn't advise him to try pretending the other years didn't happen... but I do think it's better if he knows where he stands before requesting the forms.

Kool_Katty

Question - the profit is LESS than £2500

Could he contact the Tax Office and submit a P810 rather than send a self assessment form?

silvercar

Just ring the tax office. If he is really nervous he can do it anonymously.

I would reckon, the tax office will say he needs to complete tax returns for those years. The fine could be £100 for each late return; possibly they may only charge him once.

With a small profit, I can't see much penalty being imposed. There certainly won't be any harsh words or threats of giant fines or imprisonment. The revenue wants to get people on board.

You could post on the tax board for help completing the forms. Unless his affairs are very complicated or he is absolutely hopeless with a calculator and isn't happy to put information on an anonymous forum, he may well decide it isn't worth employing an accountant.