HMRC Mix Up!

mrs.butler

Morning all, I am very new to being self employed so could really do with some advice!

I have been self employed since 1 April 2010, and I returned my first self assessment with plenty of time, and all has been paid.

My Father is also a sole trader, and I invoice him (name not company) for my commission (wages), but we do not work in the same building. I do all his administration work for him. I work from home, and we have never registered as a partnership. My account can back me up on this, as he has looked back over our self assessment forms, and the two are not linked at all.

Yesterday he had a Partnership Tax Reminder Request arrive at his address, with the company name, but neither of our names were mentioned.

He has spoken to HMRC, and they have told us that our mutual accountant has set us up as a partnership. He has since told us that this is not the case, and that there is no documentation saying so.

Neither of us have ever received any paperwork mentioning a partnership before, but they are now telling us that we are at risk of being fined for late returns. How can we recieve a reminder (dated 15th Dec 11)when we never had the paperwork in the first place?

This has really scared me. Our accountant has told us to ignore it as it must be a mistake. I really hate the idea of this hanging over our heads.

Can anyone advise what I should do?:eek:

pjclar02

Hello there

I never fail to be shocked by advice given by some accountants. I think ignoring the reminder is the worst thing you can do.

If your accountant has registered a partnership with HMRC then as far as they are concerned it exists and a return will be due. I would file a nil return showing no activity for 2010/11 and put a cessation date the day after the commencment date (you would need to check with your accountant what the date was he stated the partnership commenced). Therefore you will not receive any partnership returns in future.

Others on here may have a better solution but this is what I would do. If you ignore the notice you will incur penalties.

Oh - and start to look around for another accountant!!!

mrs.butler

Thanks for coming back to me. I do believe the accountant and he says that he will show us the paperwork to prove so.

I would be happy to do so but the return date for paper returns has already passed. This is the only time we have recieved anything connected with a partnership. I do not have the software to return it online, and neither does my accountant.

Should I print the forms off and send them and then incur the £100 fine?

mrs.butler

Also I dont have a Commencement and Cessation Date to put down, as according to our accountant it didnt happen!

chrismac1

Overall I agree with pjclar here for the following reason:

Expect commonsense, understanding, integrity and efficiency from HMRC and you'll consistently be disappointed. Expect jobsworthiness, meanness, a desire to milk vulnerable taxpayers and bumbling ineptitude and you'll occassionally be surprised.

For any decent accountant, keying in a partnership return with zeros and a cessation date is a five minute job and I would not be charging you for it regardless of how it came to be set up.

The alternative is to call HMRC right in the middle of the busy season and find someone who is going to go out of their way to delete the partnership record. Much more likely they will say the record was set up either by you or your accountant and tell you that deleting it is "not in our procedures". I would happily put £1,000 at even money on this latter scenario or something similar.

mrs.butler

Thanks chrismac1. If he wont accept respnsibility I dont know what to do as we dont have the dates. Also he does not have the relevant software.

antonic

But the Partnership return will still need to be filed or you will get an automatic penalty.

I would also check with the VAT (if your VAT registered) that your accountant hasnt also registered you as a partnership there as well.

It also goes to prove that accountants as well as HMRC make mistakes !.

Shouldnt this be retitled Accountants Mix Up ? as I cant see why its HMRC mistake ?

mrs.butler wrote: »

Thanks chrismac1. If he wont accept respnsibility I dont know what to do as we dont have the dates. Also he does not have the relevant software.

mrs.butler

Thanks antonic. You are correct. I think I am going to ring the HMRC now and ask them what date they believe the partnership was created. If they can tell me I will then return the forms all filled in with 0, and put that the partnership was dissolved the following day.

Feeling very angry now!

Mikeyorks

Your father is self employed - and has a UTR? That's how HMRC know him. You are self employed and have your own UTR? That's how HMRC know you.

There is no link whatsoever between the UTRs - unless someone forges one. HMRC do not trawl through the SA database and looking for similar names and creating links - it does not happen. Notwithstanding the usual diatribe from Chrismac.

You haven't done it? Which only leaves your accountant - who has already perpetrated the ultimate idiocy by telling you to ignore the reminder.

Get your accountant to sort it - free of charge. Do not ignore it - as I doubt your title to this thread is accurate.

pjclar02

I agree with the others that your accountant should sort this - and if HMRC issue a penalty as neither you, nor your accountant, are able to file the return online I feel that your accountant should pick up the penalty.

I have to say I haven't come across an accountant in a while who does not have software to file self-assessment tax returns online.

POPPYOSCAR

pjclar02 wrote: »

Hello there

I never fail to be shocked by advice given by some accountants. I think ignoring the reminder is the worst thing you can do.

If your accountant has registered a partnership with HMRC then as far as they are concerned it exists and a return will be due. I would file a nil return showing no activity for 2010/11 and put a cessation date the day after the commencment date (you would need to check with your accountant what the date was he stated the partnership commenced). Therefore you will not receive any partnership returns in future.

Others on here may have a better solution but this is what I would do. If you ignore the notice you will incur penalties.

Oh - and start to look around for another accountant!!!

I agree. I would never ignore anything sent by them.

Accountants do make mistakes. Ours has before and the revenue were very helpful and understanding. They asked us to get the accountant to get in touch with them which they did and it was sorted out with no detriment to us.

I also find it strange that the partnership would suddenly be 'created' by the revenue, but anything is possible I suppose.

The worst thing here I can see is being told to 'ignore' it.