Tax avoidance and HB fraud.(20 Posts)
Name changed for this.
Not sure if this is the right place but what I am going to say is pretty horrible however I hope I will get helpful advice and not a bashing as much as I deserve.
Basically I have been self employed for 3 years now and I have been fiddling my taxes, not disclosing everything.
Also for the same ammount of time I failed to update HB with increase in mine and Dh's income.
I want to come clear and confess everything to HMRC and HB.
My question is: do I need to contract a solicitor or accountant or can I do on my own?
I think that for HB it is straight forward, I just need to report and comply with investigation but HMRC is more complicated as there are forms involved etc. When I google it there are few websites offering practical help, should I use their service?
Do I deal with both at the same time?
Also I intend to apply for a part time job starting in September, will this have any impact on my application as I will need a DBS (school).
Probably will keep my self employed job part time too as I will need as much as possible for overpayments and etc. But will start fresh and do things properly.
I spoke to Dh about this for the first time yesterday and he is appalled, refusing to talk to me. He is innocent.
All I want is pay for my crime and move on asap.
So I know I am not of good character and I absolutely have no excuses.
I just need some advice before I take action before I start procedures. I know if I go to CAB they will take my details and maybe report me but I want to do voluntary.
Please no abuse. I will pay back.
Gosh, no relevant experience or advice to share. But.... good on you for wanting to come clean. Hope it all works out for you. x
I have no idea either. Legal advice may be advisable though!
You've stated that "you have been fiddling...".
As self-employed you are allowed to offset genuine business expenses, so I would make sure that you really have claimed/recorded everything that you can. I run my own (very) tiny business and I tend to record all the sales, but forget the valid expenses (eg claiming petrol at 45p per mile, rather than actual cost; stationery, elect, gas, costs of sale etc). I don't know what your business is but you may be able to depreciate assets (eg new computer, beauty couch, builder van etc) in your accounts (tax treatment is different but you are given some allowances). That will give you your taxable profit, but you then get a personal tax allowance. Have you used that?
Next I think you need to re do your accounts for the last 3 years so that you can see clearly what you filed vs what you now believe the figures to be.
If you are genuinely a start up I would be very surprised if you are making huge profits in Year 1 straight away. So if you have made trading losses for tax, there are carry backs from future years profits.
So I am just wondering although you may have deliberately intended not to declare income whether the financial impact will be smaller than you realise. Thats why redoing your financials will be key so that you can see the numbers clearly. For HMRC I wonder if you could declare a post year adjustment and catch up (without stating your deliberate intent). You will probably pay fines and interest but as you are declaring there may be less impact. Perhaps an accountant here would be useful.
I would be more worried about the HB. You mention both you AND DH having an increase in income. They are really hot on that now.
It's funny I usually hate tax dodgers but you so sound repentant.
You may not be aware that you are entitled to legal privilege in your dealings with an accountant. I am one, and am also a Money Laundering Reporting Officer. Please don't tell me your real name.
An accountant will be able to check your income and ensure that you gave claimed all the relevant expenses and allowances.
Please be aware that most accountants don't know much about benefits and their rules as most of our clients don't claim them.
As Tiredsadmum mentioned, owning up and sorting it out without HMRC catching you will reduce the penalties.
AuditAngel - fab user name (I don't know if I ever had a client who thought that way!)
Thank you so much!
tiredandsad: I know that I can claim a lot of expenses. I can claim rent/electricity/water/stationary/clothing/phone bills/wear and tear...these are some on the top of my head but much more can be found. As you might suspect I am absolutely rubbish at keeping on top of paperwork and I am a serious procrastinator so every time when I needed to do a return, I left for the last minute and did a lousy calculation without even thinking in percentages for all the above.
I have being banging my head on the wall since yesterday, and thinking about using the companies that promise help with Tax Fraud but now I wonder if it is possible to find a local accountant and explain to them my situation and give them all the papers and info they need. Would they be able to calculate it all for me? So I can try the post year adjustment.
Yes the first year I probably didn't make a profit at all.
Thanks for the suggestion. I will look for an accountant first.
auditangel Thank you. I don't fully understand what you mean by You may not be aware that you are entitled to legal privilege in your dealings with an accountant Could you explain please?
And can you tell me if an accountant can really calculate 3 years worth of taxes for me? And give some advice on how to amend my situation with HMRC?
Also how would I know if the accountant is reliable, how do I find one in my local area and how much I am expect to pay for the service above?
I know the HB is a totally different issue and as soon as I come forward they will ask for figures. I have Dh's correct figures but not mine.
If the accountant sort them out first for me than I can give an accurate picture. I don't have payslips of my own to send and I know I did my returns online, but I didn't print anything off nor remember receiving any statements (can have a look though as I don't normally throw important papers away.
Thank you so much for being so helpful.
Professional legal privilege means the accountant won't disclose anything you tell him or her without your permission.
I think a local accountant is the way to go. Take ALL your paperwork with.
Are you sure about the legal professional privilege Audit Angel?
The internet suggests otherwise
I would find a local qualified accountant (try the sole practitioner road first if you can) who has experience in dealing with HMRC investigations (as not all do).
Yes with the correct paperwork, all accountants can calculate what your tax liability should have been (and will need to do this before approaching HMRC).
As you intentionally fiddled your books, you will be looking at penalties but as you are fessing up and repentant, that will count in how they are calculated - but you just wont know until you sit down with an accountant
Never heard anything about the legal professional privilege before tbh...
We all make mistakes and many would not be brave enough to confess so I think you are doing the right thing starting the process now
In haste: privilege does not extent to accountants giving tax advice: Supreme Court rejected this:
Under Money laundering regulations, if you go to an accountant and explain what you have done and that you want yo get straight they won't report you for the fiddling.
They will be able to help you work out what your accounts should have been (I'm presuming it isn't a ltd co.?) and refile your tax returns for you. It may well trigger an inspection/investigation.
AuditAngel, if you use a qualified chartered accountant, they are governed by guidelines and ethics, which cover this behaviour and the accountant would have to report it otherwise they would risk being disqualified from their professional body amongst other consequences of ignoring this behaviour
There is also a difference between re filing returns because previous returns were wrong due to genuine errors made innocently and re filing returns because they were intentionally filed incorrectly as the OP has spoken about
I have been trying to get an accountant since I posted here and finally found one. I think it is a small office with few accountants. It is not very local but accessible. My initial consultation is on Monday.
I tried so many accountants, even not explaining what the problem is, they don't return calls or emails which is frustrating.
The one I am hopefully going to work with, asked what I am looking for and I briefly explained, basically I said I committed errors in my last returns and wanted to correct it. They said it is fine and they can help.
If I understand correctly, any accountant I work with will basically report me? Not the Money Laundering Officers only?
I made a mistake on my OP. I have been self employed since 2011 so I have done two S.A to date. So it is not 3 years of 'fiddling', only two as I intend to do everything correctly next time.
I have a very small business, I am a CM and at my busiest times had only 3 children on the roll and they were part time. At my busiest time I had around £600 per week but not every week. Some weeks I would have less than £150 coming in. I offer a very flexible and affordable service (don't charge for child's holidays, don't charge for holding child's place etc) so the income was very variable.
I just got muddled up with my records and kept few receipts. I always procrastinated with the financial paperwork and it was time to do my returns I just calculated amounts that I thought were roughly right without adjusting the discounts I should make with my rent, electricity, water, food, costs with equipment, wear and tear, travel, activities etc.
I know I should have contacted an accountant from the start when I suspected I wasn't going to cope with the financial paperwork.
It is a shame if they report me because I want to do it voluntarily. However if there isn't another way, be it.
I don't have a lavish lifestyle, I rent a flat in a rough council state, my daughter goes to a school which is avoided because it is a poor area.
We don't have a car, we don't wear designer brands.
I made a mistake and want to pay for it.
Hope I can be treated a little bit better than the people who make mistakes but don't care.
Also I know at least one accountant out there who actually help her clients to commit fraud. Obviously I never contacted them.
No, they shouldn't report you if you're contacting them in order to come clean. They only need to report you for money laundering if they discover it, make you aware of errors and you refuse to correct them.
Thanks. I feel much more confident for my appointment now.
Before you go, have a read through this
it puts the absolute basics of accountant speak into normal english
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