Self employed accounts

highlandgurl

My partner is a NRP. He pays maintenace through the CSA to his ex. They have recently asked for his income details. He is self employed and sent them a copy of his tax assessment that he gave HMRC (it shows his profit/loss totals) but the CSA say this doesnt give enough detail and are asking for his full accounts. We dont understand why they need this - if HMRC are happy with it why arent the CSA? Are they entitled to see his full accounts?

AnxiousMum

Maybe what they are looking for is to ensure that his lifestyle is consistent with his income - if his income from teh business is low - is he diverting money elsewhere, maybe paying you a monthly salary instead of paying himself a proper wage etc. If they have asked for them, and he refuses to provide them, - I suspect they will just make an assessment based on whatever other information that they have - possibly wrong information provided by the PWC.

PreludeForTimeFeelers

highlandgurl wrote: »

My partner is a NRP. He pays maintenace through the CSA to his ex. They have recently asked for his income details. He is self employed and sent them a copy of his tax assessment that he gave HMRC (it shows his profit/loss totals) but the CSA say this doesnt give enough detail and are asking for his full accounts. We dont understand why they need this - if HMRC are happy with it why arent the CSA? Are they entitled to see his full accounts?

There are some differences between what the CSA will accept and what HMRC will accept - for example HMRC allow you to knock off money for depreciation, whereas the CSA don't. The HMRC also allow money for entertaining clients, and the CSA don't.

alwayspuzzled

As I understand it then it depends on if he is self employed or a limited company. If you are ltd then you have to provide accounts, if you are self employed there is no requirement to have accounts so it is only your self assesment paperwork they can demand.

Sidekick_2

AnxiousMum wrote: »

Maybe what they are looking for is to ensure that his lifestyle is consistent with his income - if his income from teh business is low - is he diverting money elsewhere, maybe paying you a monthly salary instead of paying himself a proper wage etc. If they have asked for them, and he refuses to provide them, - I suspect they will just make an assessment based on whatever other information that they have - possibly wrong information provided by the PWC.

The departure would have had to have been applied for by the PWC for lifestyle of inconsistent with income to be looked at.

Sidekick_2

alwayspuzzled wrote: »

As I understand it then it depends on if he is self employed or a limited company. If you are ltd then you have to provide accounts, if you are self employed there is no requirement to have accounts so it is only your self assesment paperwork they can demand.

This is not correct, self employed people to have to submit accounts to the CSA, Limited companies do not. If an appeal has been applied for and was taken to a tribunal, then the tribunal can only ASK to see the accounts of the LTD Company.

Sidekick_2

PreludeForTimeFeelers wrote: »

There are some differences between what the CSA will accept and what HMRC will accept - for example HMRC allow you to knock off money for depreciation, whereas the CSA don't. The HMRC also allow money for entertaining clients, and the CSA don't.

This is correct the CSA work out income before depreciation and some expenses are taken off.

alwayspuzzled

Sidekick wrote: »

This is not correct, self employed people to have to submit accounts to the CSA, Limited companies do not. If an appeal has been applied for and was taken to a tribunal, then the tribunal can only ASK to see the accounts of the LTD Company.

But there is no requirement for a self employed person to keep formal accounts, as long as you have correctly completed your self assesment forms and have reciepts for any expenses you have claimed you do not have to have any ledgers, profit and loss or other spreadsheets. So the CSA can only actually demand your SA as submitted to HMRC.

bdt1

alwayspuzzled wrote: »

But there is no requirement for a self employed person to keep formal accounts, as long as you have correctly completed your self assesment forms and have reciepts for any expenses you have claimed you do not have to have any ledgers, profit and loss or other spreadsheets. So the CSA can only actually demand your SA as submitted to HMRC.

You are correct..............but as the wife of a self-employed NRP (I'm NRPP), whoknows from experience regarding 'lifestyle inconsistent'.

If you (or he) cannot supply the above info relating to his business, then CSA have lots of powers that they did use in our case. They pulled off copies of bank statements in my husbands sole name and that of our joint accounts, they visited customers of his who he regularly does contract work for, and tried to intimidate them into giving info (in truth all they did was alert hubs and give no info), they then visited us at our home wit their 'evidence'.

Fact is we then appealed a decision which was based on their 'lack of' evidence, supplied all the info they could have had all along to prove my hubs is not Richard Branson, we won and arrears they said we owed wiped.

If you do not supply whst they ask, they will make an assessment (Interim) based on what they 'assume', which is usually much higher than if you just tell them what they need to know and supply evidence. CSA Criminal Compliance have powers as said to get bank statements, but suppose dependent on how Hellbent PWC is - ours is and has always been bitter/twisted and Hellbent on trying to destroy us, even after 18 yrs of being together

alwayspuzzled

bdt1 wrote: »

You are correct..............but as the wife of a self-employed NRP (I'm NRPP), whoknows from experience regarding 'lifestyle inconsistent'.

If you (or he) cannot supply the above info relating to his business, then CSA have lots of powers that they did use in our case. They pulled off copies of bank statements in my husbands sole name and that of our joint accounts, they visited customers of his who he regularly does contract work for, and tried to intimidate them into giving info (in truth all they did was alert hubs and give no info), they then visited us at our home wit their 'evidence'.

Fact is we then appealed a decision which was based on their 'lack of' evidence, supplied all the info they could have had all along to prove my hubs is not Richard Branson, we won and arrears they said we owed wiped.

If you do not supply whst they ask, they will make an assessment (Interim) based on what they 'assume', which is usually much higher than if you just tell them what they need to know and supply evidence. CSA Criminal Compliance have powers as said to get bank statements, but suppose dependent on how Hellbent PWC is - ours is and has always been bitter/twisted and Hellbent on trying to destroy us, even after 18 yrs of being together

My point is though that not all self employed people CAN provide these accounts that they ask for. I am also NRPP and also self employed in the same trade as NRP and can tell you without a doubt 90% of the blokes I've worked on site with do not have accounts. They do not run a 'business' with accounts and paperwork just register with HMRC under the construction industry scheme (CIS) as self employed and hand an accountant a pile of payslips and reciepts once a yr and pay a couple of hundred quid to have their tax return completed for them.

I fully agree with you regarding their assumptions, even though I have supplied them with full details and figures for everything they asked about the tribunal service have still made up an extra assesable income of £140/week which simply doesn't exist.

I am disgusted that even the tribunal service can not understand basic financial affairs, as although we do not yet have the tribunal statement of reasons I can see from the figures that the tribunal judge thinks that a tax refund from 2 yrs prior to the tax year the assesment was based on counts as ongoing extra assesable income.

PreludeForTimeFeelers

With self-employed cases on CS2 now they'll not do an interim assessment, if you fail to provide evidence of income then they will go to the taxman - if you last tax return was over two years ago then they will usually look to National Average earnings for your line of business, and use those figures, the onus is on you to prove how much you're earning.