correct amount of tax?

atb1972

I apologise if I am posting in the wrong forum as my dilemma is to do with my divorce settlement, but want some advice about whether my ex is being honest about how much tax he pays.
He is self employed and declares an income of 22k. He has given my solicitor his bank statements for last 12 months, however they aren't the official ones he has written all his transactions for the last year on spread sheets. Obviously he is hiding something! On his business accounts he has paid 21k to HMRC VAT, shown as 5 payments of approx 4k over a 12 month period. This doesn't seem to be to believable. He is a very savvy businessman and well organised so don't think it would be money he has previously owed.
Thanks in advance for any help

agrinnall

Your solicitor needs to insist on seeing actual statements rather than spreadsheets. I'm not familiar with what divorce law allows but seeing his tax returns would hep too.

jimmo

You probably won’t want to hear this but, as a taxman, I have had to meet (in separate interviews) the warring parties to a divorce all too often.
If your ex has been fiddling his taxes the chances are that he didn’t suddenly start fiddling when your relationship hit the rocks. He’s been doing it for years. It is your civic duty to report him to HMRC for fiddling but the net result will be that there is much less money for the two of you to fight over.
Similarly you have a solicitor, presumably he has one too. The legal fees are growing and growing as we speak and, particularly if both sides end up with barristers, the net result will be that HMRC will end up with its “pound of flesh”, the legal beagles will have the rest and both you and your ex will end up, penniless but with a warm feeling inside.

Skint_yet_Again

atb1972 wrote: »

I apologise if I am posting in the wrong forum as my dilemma is to do with my divorce settlement, but want some advice about whether my ex is being honest about how much tax he pays.
He is self employed and declares an income of 22k. He has given my solicitor his bank statements for last 12 months, however they aren't the official ones he has written all his transactions for the last year on spread sheets. Obviously he is hiding something! On his business accounts he has paid 21k to HMRC VAT, shown as 5 payments of approx 4k over a 12 month period. This doesn't seem to be to believable. He is a very savvy businessman and well organised so don't think it would be money he has previously owed.
Thanks in advance for any help

Assuming he is self employed sole trader and not a Ltd company -

Assuming the £22k is his net taxable profit ie after allowable expenses have been deducted

Assuming he has no other personal income / investment income or dividend to add to his tax bill or take him into higher rates

Assuming this calculation is for 2014-15 Tax year ending 5 April 2015

Net profit £22000 minus personal tax allowance £10000 = taxable £12000

Paid to HMRC as self assessment =
income tax due £12000 x 20%
Class 4 National Insurance due £12000 minus lower profits limit £7956 - charge is 9%

Paid separately in 2014-15 Class 2 National Insurance Contributions due standard price = £2.75 per week

EDIT - form SA302 from HMRC will show the yearly income tax/class 4 national insurance charged and the income.
Hope that helps -
Sorry know nothing about VAT

booksurr

atb1972 wrote: »

On his business accounts he has paid 21k to HMRC VAT, shown as 5 payments of approx 4k over a 12 month period. This doesn't seem to be to believable.

what he pays in VAT has nothing to do with whether the business is making a profit or not. Grossly simplified VAT is the sales figure minus the purchases figure x 20%, profit does not enter into it.

VAT is paid quarterly, 5 payments are therefore a 20 month period not 12 months

do not let your bitterness and desire for money run away with you, as Jimmo says, all you will achieve by uninformed meddling is increased solicitor bills