investigate tax

wapman

I was self employed 2 years ago but now work for a company in full time employment. When i was self employed i used an account and took my books to him each September every year for him to complete the tax returns for the tax man. He would send me copy to sign and I'd pay what i thought was high tax bills each year. Around £8000 each year.

I've now received a letter from the tax man stating that he intends to investigate my tax affairs from the time when i was self employed. This is because my accountant only submitted estimates on the tax returns ! I've spoken to my accountant who confirms this is true and recommends that i offer the tax man a settlement figure to close this matter.

As you can imagine I'm not very happy at the accountant only submitting estimates on the tax return. I paid him a good price for doing my books and now this turns up. I thought all dealings with the tax man where over now as I've been employed for over 2 years now.

My accountant as told me not to speak with the tax man and to let him deal with it all but not sure if i can trust him now.

So where do i stand ? Any help would be much appreciated.

WHA

Don't talk to the Inland Revenue yourself whatever you do. All this "friendly, friendly, we're here to help" is complete rubbish. It may be true with the customer service advisers who answer the phone and see visitors at reception, but if you are under investigation, you are dealing with the back-room inspectors who are just there to get their pound of flesh.

Do you recall why estimated tax returns were submitted? Were your books and records complete and accurate? Did the accountant raise any queries with you? I ask this because getting a different accountant will cost you a lot of money as they may have to re-do everything the first one did. If the first accountant really was negligent then you should be able to recover the fees paid to him, and maybe compensation if you're out of pocket, but it is very hard to prove and you need to know you're in the right.

I would go to see another accountant without delay, but don't mess about with anyone cheap - get a proper accountant this time, you may find that you actually owe less tax!

JB2006

I agree with WHA - the only reason estimated returns would have been submitted would have been if your accounts were not finalised or information was missing. You need to find out firstly why estimated returns were filed in the first place. If you do not think your accountant is up to much then I would definitely approach another accountant to sort this out. Any new accountant will be able to get the calculations and workings for your tax return from your present accountant so not all work will need to be duplicated. This sharing of information is common courtesy among accountancy firms. Good Luck