self employed - is the IR being dodgy?

sivyour

I recently registered my partner for his self employed earnings as a DJ. He then got a call from the tax office at his employed job where he has worked for years.
On calling them back he discovered that they were requesting 9500 in tax from his earnings in 04-05 and 05-06.
He did work as a dj in 02-03 and informed the tax office in PERSON when he stopped DJing when his then partner became pregnant.
They moved house several times but this was not relevant in anything other than his paye job.
They say that they sent returns to his old address and therefore he must fill in new ones.
They have requested that he fill in tax returns for o4-05 and 05-06 when he did partial work, post informing them.
Really he should have contacted them again to say that he had started again!
My question is, is he liable for the fines that they are giving him for the year after he informed them he had stopped djing and should he fill in a tax return wich they are requesting if he was not, and had told them he was not, self employed?
They have always had his contact info and it was this they used to contact him when he registered this time but continued to send, or have claimed they have, tax returns to his old address.
I apologise for the messyness of this question in advance and if anyone needs to know more to advise us, please ask.
best wishes.

Elaine_Wilson

Can I clarify some of the facts.

He worked as a DJ during 2002/03 and completed a return for that year.

When did he actually stop self employment? If it was during 2002/03 then the relevant box should have been ticked on the return.

If it was after 5th April 2003 then the box should have been ticked on the 2003/04 return. I assume he completed one for this year as you do not mention any problem about this.

He has been asked to complete forms for 2004/05 and 2005/06. I am not clear when you say he did partial work. You say later that he was not self employed during those years. Could you clarify please.

In any event if forms have been issued then there is a legal obligation to complete them, regardless of whether he was self employed or not. If there is no additional tax owing for those years then the fines will be reduced to nil (the maximum fine is the lower of the amount of tax outstanding and £100).

You have also said that HMRC were kept informed of his contact details. Do you have any evidence of this as it might help in arguing against a fine. Was he receiving notices of coding at his new address? Anything that shows they knew the correct addresswill help.

System

At £9500 it sounds to me as if HMRC have raised a determination against your partner. This means that having received no response to previous letters and tax returns thay have looked at his self-employed income in the earlier years and estimated how much tax he would owe for the years covered by the outstanding tax returns. The figure would also include penalties and interest charges.

It's very simple to sort this out and avoid a court appearance. Your partner just has to complete the outstanding tax returns. Make an appointment at your local HMRC enquiry centre and the staff there will guide him on completing the forms.

In future if he decides that he wants to cease self-employment he has to put the relevant cessation date on that years tax return and submit it in a timely fashion rather than leave it until the last minute. Leaving it to the last minute means that it may be too late to stop the issue of a tax return for the next tax year.

sivyour

sorry.
Clarification.
02/03 he worked as a DJ, all was well
03/04 Not-dj ing
05/06 partial work
06/07 Not dj-ing
07/08 I informed the tax office and sorted his paper work - Am currently on with the 'books'
I think this is right. He went to the tax office as his circumstances were changing very rapidly due to the problems with the ex so he moved back abroad on several occasions. He informed them he was no longer intending to work. Then in 05/06 he returned and started working BUT DIDNT INFORM THEM, not for being sneaky but because he was being lazy.

I have advised that he go to them and discuss with them a plea bargain.
He is not sure how many nights he worked but knows that he earned £140 each time he worked a night. All the money however, went into his ex's bank account and so he wont be able to get exact info.

He then had to buy cd's and pay for taxi travel as he didnt have a car to get to and from a venue. He is unsure of how much he earned as the guy who employed him didnt keep proper records and got turned over by the IR. This is why I have suggested a plea bargain with them? Is this right to do?

(Is there anything he can legit claim without reciepts?)

Your assistance is much appreciated.