Late / forgotten invoice for previous Tax year problem

MEsteve

Hi there - wondering if anyone can advise...

My Mum has some invoices of income for last tax year (work done in 2010) that were not put through...maybe £2k worth...however - I dont think she earned above the personal allowance and was due to pay any actual tax. She has an accountant who deals with her tax but is worried now as she signed to say it was all there. Will there be a fine? What is the best way to deal with this? I guess we want to know what trouble we are in...

taxing

Hi

Tell the accountant and at once....

Mistakes happen. That's being human. 'Hiding them' for whatever reason (genuine embarrassment included) is fraudulent and puts your mum in a very bad position both with the taxman and her accountant.

The penalty regime for wrong tax returns got so much harsher from April this year; now even innocent errors can be penalised - if the taxpayer doesn't tell the taxman, before the taxman finds out himself.

Your mother will have signed an agreement with her accountant binding her to act honestly; making full disclosure of everything needed for her accounts and for tax. This includes things she has innocently overlooked and timed from when she found out about them.

If she doesn't tell the accountant, and the accountant later finds out about it then he/she will need to consider a report to SOCA (serious crimes bods) under the money laundering regulations: YES, the rules are that strict!

As I said, mistakes happen: that's being human. It's what you do after you discover that mistake which counts.

Regards.

P.S. - reading back, this seems stroppy - sorry. Re. penalty, probably none if she gets it sorted out now and, like you say, there is no additional tax due. Even if there was tax to pay, that would be due, plus interest from 31 January 2011. Strictly then a penalty of up to 30% of the extra tax could be taken, mitigated (that is reduced) to 0% (so no penalty) for voluntary disclosure.

tyllwyd

Do you mean work done in the 2010/2011 tax year or was it the tax year before that? If it was 2010/11, the tax isn't due until January, so if she tells her accountant asap, I would have thought it could be sorted no problem.

MEsteve

Hi both - thank you for the replies - not stroppy at all just factual and I agree with how you act after errors being the important thing...

The invoices are dated from Feb 2010 -> March 2011 most recent...

So maybe not a problem?

tyllwyd

I don't think it should be a problem. Do you think the accountant has even submitted the return to HMRC yet - it isn't due until January 2012, so chances are that it is still on his desk. Even if he has, it should be possible to amend it.
http://www.hmrc.gov.uk/sa/correct-repay.htm
so don't panic, just let the accountant know.

jennifernil

MEsteve wrote: »

Hi both - thank you for the replies - not stroppy at all just factual and I agree with how you act after errors being the important thing...

The invoices are dated from Feb 2010 -> March 2011 most recent...

So maybe not a problem?

February 2010 falls into the 09/10 tax year, so that should already have been submitted and any tax due paid by 31st January 2011.

March 2011 is in tax year 10/11, so still plenty of time left to submit that one.