olmotors Registered Posts: 14 New contributor 🐸
I have a client who in both mine & my business partner’s view is very dodgy! We have been asked to produce the year end accounts for the last two years as she is thinking about selling the business. None of the income has a receipt/invoice to go with it because the client "doesn’t use a till only a cash tin" but they do have a "diary showing her appointments" (which I have never seen!) Most of the payments into the bank account have come from Streamline which I understand to be a card machine. Surely there would receipts to match these? On the bank statements she has put by the side of the income "Took x paid y rent, paid in z."

I am also concerned because the expenses include transaction where the business card was used instead of her personal card. I have not found any record of an accountant completing her tax returns and am concerned that her income is understated and her expenses is overstated hence tax avoidance. If she did get an accountant to complete her tax returns then surely she would already have the year end accounts?

As we have only started trading in the last few months I'm not sure what to do, if any one could give me any advice that would be a great help.


  • JodieR
    JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
    Unfortunately in real life not everyone runs their business like an AAT textbook! Yes, I understand that there MAY be something dodgy going on, but not having a till and using the business card to buy groceries doesn't necessarily mean that you're dealing with a criminal here.
    If I were you I would point out to her the 'dangers' of running a business without adequate controls and say that if the accounts you produce show that she's made a greater profit than what's been declared on her tax returns then they should be amended. You may find that profits are so low that no tax would need to be paid anyway and therefore it wouldn't make much difference what she's declared or not declared. Or, of course you may end up in a right pickle and find out that she should have paid thousands of pounds of tax and then refuses to come clean about it, in which case you can then consider filing SOCA reports.
    Also, by looking at the rest of the figures ie gross profit margins you should be able to get a feel for whether the turnover figure looks realistic.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Very good advice from Jodie.

    Also, get some payment up front!
  • olmotors
    olmotors Registered Posts: 14 New contributor 🐸
    Thanks for all the advise everyone.
  • Tiger
    Tiger Registered Posts: 63 Regular contributor ⭐
    Agree with Jodie and Monsoon and on the basis of the information provided it dosn't sound particularly that dodgy or unusual (in my opinion)

    Mobile hairdressers spring to mind?? :D
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