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Does a financial advisor have a duty to disclose information to the revenue?

(32 Posts)
taxattack Tue 11-Dec-12 11:42:26

I'd like to sort out tax returns which I've been lazy in dealing with. Would like to discuss with my financial advisor but wonder if he might have any professional obligation to disclose information to the revenue.

I'd rather sort it out rather than have the revenue come knocking which I seem to think would have worse financial implications. Am I correct in thinking this would be the case?

chablis that's the set up I had in mind, I just remember that some accountant friends had limited tax experience, just as I had limited accountancy experience (began and ended with sole trade income and expenditure accounts!)

ChablisLover Mon 17-Dec-12 00:26:10

Mr anchovy

I work for a small firm ( there are 5 staff) and it has a dedicated tax department (me!) so it really does depend on the firm.

Op - a good recommendation perhaps from a friend or go to see a
Local firm.

This is not a difficult situation but it will need to be sorted out. If you have a return to make this year, do it as soon as possible as there are automatic penalties which cannot be mitigated for late returns.

MrAnchovy Sun 16-Dec-12 23:17:36

Is it reasonable to assume to most accountants dealing with personal taxation will be up to date with the nuances related to rental income eg tax breaks?

Do ask if they are but most will be unless they specialise in a particular area (some firms only deal with builders, or limited company contractors etc.)

Also wonder if better to use someone accustomed to dealing with tax investigations?

This isn't an investigation is it? Even if HMRC call, the first stage will be an "enquiry" where you will get the chance to make a "prompted" late return. Only if they are still not happy will there be an investigation so these are relatively rare; I haven't had one for a rental client so I would use specialist back-up in the unlikely event it got to this stage.

I picked up on the internet that there is some sort of amnesty on tax at the moment.

If you are thinking of the Tax Return Initiative this ended a couple of months ago. The current so-called "amnesty" is for home improvement tradesmen.

Forgive me if questions seem naive - seems that there are a lot of accountants out there who belong to various bodies and who do/specialise in many different areas.

I can understand your confusion, my profession is a mess sad However probably 95% of small firms do this kind of work every day.

Xenia Sun 16-Dec-12 17:18:07

Also check (and you can do this free on line not pay someone) you claimed all you could in the earler years eg I think 10% of rent as depreciation to set against the rent so in the years you made no gains you may have accumulated losses including that kind of allowance so that you add all those years of losses up and set them against the years when you think you have made a gain.

Also if this is your husband's issue why do you need to bother with it at all? You have no liability for this at all. It's for him to sort out and him to pay any back tax due if any.

MrAnchovy Sun 16-Dec-12 17:10:59

"...a firm with a dedicated tax department staffed by people with tax qualifications"?

For some backdated returns covering PAYE and rental income, a covering letter of mitigation to HMRC and advice on whether it is worth appealing any penalty imposed?

How much do you think that sort of firm would charge compared to a sole practitioner/small accounting firm that deals with exactly this sort of work every day?

As it happens I am a member of the Chartered Association of Management Accountants but I haven't recommended the OP searches for a CIMA m]ember: it would be bad advice because:

1. like the CIOT there aren't many of us about in practice, most accountancy firms are member firms/practicing members of either CACA or ICAEW (or ICAS in Scotland), but

2. like the CIOT, CIMA is a specialist qualification; many of its members focus their work on specialist areas and are less experienced in and/or charge more for routine work than accountants with a more general practice;

3. searching for an accountant on a member list is a very bad way to find one - personal recommendation is best, failing that online forums like this one and UKBusinessForum can be good as you can get to know a few people anonymously before contacting them directly.

ChablisLover Sun 16-Dec-12 09:46:15

I agree with notactually

You need an someone with tax experience so a firm with a dedicated tax department is what you need.

Not necessarily big firm though

All tax professional should be up to date and most if not all will have had dealings with revenue investigations as they are becoming increasingly common.

I would recommend (biased!) That you find an accountancy practice with a tax department staffed by people with tax qualifications. Not necessarily a big name, just a local one. This isn't an uncommon scenario.

taxattack Sun 16-Dec-12 08:40:12

Have been away from thread. Will check out the website/organisations mentioned.

Is it reasonable to assume to most accountants dealing with personal taxation will be up to date with the nuances related to rental income eg tax breaks?

Also wonder if better to use someone accustomed to dealing with tax investigations? I picked up on the internet that there is some sort of amnesty on tax at the moment.

Forgive me if questions seem naive - seems that there are a lot of accountants out there who belong to various bodies and who do/specialise in many different areas.

TalkinPeace2 Fri 14-Dec-12 19:31:36

I'm ICPA (parted company with the ACCA)
but many of the people who will know the routes through will be QBE (qualified by experience) ex CCAB (the big institutes).
Anchovy I believe has been more careful than I and is still an FCA :-)

ChablisLover Fri 14-Dec-12 19:21:32

The ciot (chartered tax advsiers) do show one man bands as it where.

They have a find a tax adviser so you can put in your area and they all pop up and you can find one that way.

Personal recommendations are best but ciot advisers are highly qualified and the best to advise you.

I'm biased as I am a member but wou recommend you get this sorted as soon as possible. It won't go away and could easily get worse. I don't mean to scare you but I have seen happen. You have to make the first step and the rest comes easy and you will feel a weight has lifted as you are finally dealing with it.

TalkinPeace2 Fri 14-Dec-12 13:12:39

In the short run,
ask one of the bods on here ....
www.ukbusinessforums.co.uk/forums/forumdisplay.php?f=55
there are some REALLY good, professional, (fast) people on there ....

taxattack Thu 13-Dec-12 23:45:03

Personal recommendation is what I'd prefer but if that is taking too long where's a good source to pluck one from?

Can you tell that there's some fire at my tail?

pippop1 Thu 13-Dec-12 17:00:51

Accountant is the way to go. As a general principle, it's usually preferable (fine wise) to approach the HMRC than have them approach you.

TalkinPeace2 Thu 13-Dec-12 16:57:47

As MrAnchovy says, get an accountant by personal recommendation
they will find out a lot about so so it needs to be somebody you feel you can trust and talk to.
Penalties up to the current tax year could not be greater than the tax owed so if it was not much, they will be not much - and a half decent accountant will make it not much grin
AND
HMRC are trawling Land Registry and mortgage data at the moment so its best to go to them before they come to you.

taxattack Thu 13-Dec-12 09:27:45

Ok, this is all useful information. Will get my finger out.

riksti Thu 13-Dec-12 06:57:37

Just one extra point to add: if you've been renting the property commercially (that is, at market value) and in previous years the property made a loss then your tax bill might be lower than you think since previous years' losses can be carried forward against future profits which would limit the tax due. But you do need to notify HMRC of those losses so I would also suggest contacting an accountant to help you sort it all out.

MrAnchovy Thu 13-Dec-12 00:04:01

To answer your other question taxattack it is not a professional obligation to disclose information, it is a statutory one under the Money Laundering Regulations. If you tell an accountant that you have taxable income you haven't declared then unless you work with that accountant to sort it out she is likely to be required under MLR to notify HMRC and is not allowed to tell you about it.

It's dh not me, I would do exactly as you say. He is the mad professor type who leaves it until the last minute. Utterly frustrating.

MrAnchovy Wed 12-Dec-12 23:57:20

I hate Jan tax assessments , hangs over Christmas.

Then do it earlier in the year - there is no reason to wait until January to file the assesment, just put a note in your diary to make sure any payment gets there by 31 Jan.

MrAnchovy Wed 12-Dec-12 23:55:27

Gigondas, whilst the CIOT is a fine institution the vast majority of tax advisors dealing with individuals are not members of the CIOT.

This is the bread and butter of small and one-man-band accounting practices (like me and Talkinpeace) - best to get a personal recommendation.

Yes if HMRC come knocking any penalties are likely to be greater - under the new regime there is a scale with fixed ranges by which penalties may be reduced and a "prompted" disclosure carries a higher minimum penalty than an "unprompted" one.

I was told that its more tax efficient to keep a mortgage on a rental property. It doesn't sound as if you are involved in huge tax fraud , I am sure a good accountant will sort it out with you.
I hate Jan tax assessments , hangs over Christmas.

taxattack Wed 12-Dec-12 23:27:40

Thanks Gigondas. Really want to sort out but the more I think about the potential penalties is the more I want to run away.

Gigondas Wed 12-Dec-12 08:05:07

Speak to a proper tax advisers as they should be able to advise not just on doing your returns but dealing with hmrc on penalties etc and in some cases negotiating a settlement.

tax adviser

Alad Wed 12-Dec-12 06:03:13

IFAs are generally not qualified to give tax advice.

taxattack Tue 11-Dec-12 22:11:20

laziness/negligence - looking grim

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