Ethical obligations

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
I've got a client (taxi driver :roll: ) who's been trouble since day 1. He'd become self employed in 04/05 but didn't bother submitting that tax return on time, so when I took him on I did 04/05 and 05/06 together - there was £50 tax to pay for 04/05 which he paid promptly but never paid the £2k tax bill due on 31/01/07.
A few months ago I had a phone call from HMRC asking whether I knew his new address as post they'd send had been returned. I said that I had no knoweldge of him moving house and haven't heard from them (or him) since.
I have now received a fax from a finance company saying that my client has applied for a banking facility and they're asking whether he's registered for Tax & NI and what his earnings are. On their fax they have his address down as a different address to the one I have.
So, there's now 2 parts to this problem:-
a) Am I obliged to tell HMRC his new address? and
b) Am I obliged to inform the finance company that although he is registered for tax, he's severly in arrears?
I've left a message on the AAT ethics helpline answerphone but don't know how long it'll be before someone gets back to me, hence the post here too.

Jodie

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ethical obligations

    Hi Jodie

    I can certainly sympathise with your circumstances, as this was the kind of position I found myself in not so long ago. My approach would be;

    a) You owe a duty of care to your client so I would be quite cute with this one in so far as to keep a note of the new address and report it when you file the next tax return.

    b) Taking a pragmatic approach to this one; What details are the finance company asking your for? You provide them with what they have asked for, they will have other means to find out if he is in a poor credit position.

    You probably feeling like there is no justice in the world, you have that 'extra' piece of knowledge about your client but until you are specifically asked for it, it would be prudent to keep it between you and your client. It'll certainly protect your PII if nothing else!

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ethical obligations

    Hmm..

    I would advise both HMRC and certainly the Finance Company that you have currently received no instructions to act for the client so cannot disclose any information.

    You should never provide details to a 3rd party without express consent from your client first. This goes for finance companies, mortgage lenders etc.

    If your client is in need of your help then now is a good time to pressure your client in getting up to date. Otherwise just let them fend for themselves and wash your hands of them.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Ethical obligations

    Thanks for the replies deans - all very valid points which have helped a lot towards straightening out this little drama.

    j

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