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backdated tax nightmare
robinga1975
Messages count : 2
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15 January 2007
A freelance musician friend of mine is having a bit of a tax nightmare that she's sticking her head in the sand about. It seems she hasn't been sent a tax return for some time - though she's reluctant to go into details, I get the impression from her haunted expression that it's at least five years - and is obviously very worried about the revenue catching up with her. She appears to have slipped through the net (she swears she's not even had a single letter from a tax office), but I would have thought it was only a matter of time before the taxman comes knocking. What are the advantages of coming clean as opposed to being caught? Either way I imagine she'll be bankrupted by the bill, but I gather there are penalties that may be more or less severe depending on this sort of factor. Also, if she set herself up as a limited company (as a couple of our friends suggest), how likely would the revenue be to check up on her "missing years"?
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simonsjdaccountancy
Messages count : 23Likes count : 0Registration : 29 November 2006Well, your friend is right to be concerned - even though she hasn't been sent a Tax Return she still has a legal obligation to notify the Revenue of her income. It sounds very much like she has simply fallen off the radar - it could be that the Revenue will catch up with her tommorrow or it may be they never will.
If they do catch up with her then they will assess her income over the last 5 years and send her a bill, together with interest and penalties which could be as much as 100% of the tax due (although more usually would be around 30%).
Setting up a Ltd Co would possibly flag her to the Revenue, but unlikely.
What should she do?
She really needs some decent professional advice tailored to her circumstances. If you ask her to email me at simon@sjdaccountancy.com I'd be happy to see what we can do to help.
robinga1975, post: 331 a écrit : A freelance musician friend of mine is having a bit of a tax nightmare that she's sticking her head in the sand about. It seems she hasn't been sent a tax return for some time - though she's reluctant to go into details, I get the impression from her haunted expression that it's at least five years - and is obviously very worried about the revenue catching up with her. She appears to have slipped through the net (she swears she's not even had a single letter from a tax office), but I would have thought it was only a matter of time before the taxman comes knocking. What are the advantages of coming clean as opposed to being caught? Either way I imagine she'll be bankrupted by the bill, but I gather there are penalties that may be more or less severe depending on this sort of factor. Also, if she set herself up as a limited company (as a couple of our friends suggest), how likely would the revenue be to check up on her "missing years"? - Contact in PM
robinga1975
Messages count : 2Likes count : 0Registration : 15 January 2007Thanks for that. Very helpful - I'll pass it on. - Contact in PM
SharpClause
Messages count : 6Likes count : 0Registration : 16 November 2006Just as a personal story - about three years back I was in a real muddle with my tax, partly because I couldn't afford an accountant, partly because I just didn't understand tax accounts, and mostly because I was just plain scared witless into a standstill. I had three different years to sort out - one was the current one, and two were two other years. I was getting these letters from the taxman, the interest was mounting up, I had no money and I tell you, I really was frightened - I didn't know who to ask for help.
Anyway to cut a long story short I eventually screwed my courage to the sticking place, went down to my local tax office and asked them for help. They were incredibly helpful. They couldn't have been more helpful in fact, and said they often see people who get in a tizz and just get completely lost.
They sat me down, helped me go through any and all tax liabilities, and also helped me respond to the Big Tax Collector to explain the situation. I mean, they could see I wasn't a tax avoider or an evader - I was just clueless. It turned out I was actually owed money too. Since then I've found my tax a breeze, and it holds no more fears. And now that I'm registered self-employed I shall be asking for their help and knowing they'll give it.
I agree with Simon - she needs to deal with it. Once the weight of it is off her shoulders she'll feel a lot better, believe me 😃 - Contact in PM
w i l l
Messages count : 13Likes count : 0Registration : 4 January 2007I have to say as well, going to your local tax ofice can save you a lot of time and worry. I strolled in there the other day in a mess and they sorted it out quickly.. no need for appointments etc. They virtually printed out all the figures and ticked the relevant boxes to tell me where to enter the figures etc. The form ended up taking about 5 minutes to complete.