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DIY Disaster! What Next?

T.C.T.C. Experienced MentorRegistered, Tutor Posts: 1,448
I have just taken on a new client who needed a little help (ha ha) with his end of year accounts. It turns out that he done his own tax return last year with the HMRC over the phone! I don't know how they accepted the figures like that, particularly as his turnover is over £100K. However, it turns out that the figures are completely wrong for the 07 08. He is asking me what he should do. I am going to complete the 08 09 accounts correctly, but should I suggest that he also gets me to re-draw the 07 08 accounts? And obviously liaise with HMRC to sort out the mess. Am I bound by AAT terms to do this? Help would be very much appreciated! :confused1:

Comments

  • EmthiEmthi Feels At Home Registered Posts: 53
    Amendment

    1. If he feels that the 2007/08 return has errors, then yes, he should correct that and resubmit the return within a certain period of time.

    2. You would be able to do his accounts but make sure you have personal indemnity insurance, incase of any undesirable event.
  • K HK H Feels At Home Registered Posts: 81
    You are not responsible for errors made by him prior to your appointment,( or even after).

    You are able to 'repair' his 07/08 return simply by writing to hmrc and quote the relevant box numbers on the tax return and tell them the correct figures to go in the boxes.I would ,however, get his written approval to do this on his behalf.
    They will then re-assess that year with the correct tax payable.

    There will be no further action unless it is selected for enquiry as per all taxpayers.


    K H
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Thanks K.H. That sounds very sensible.:thumbup1:
  • Nilesh MandviaNilesh Mandvia Feels At Home Registered Posts: 91
    MLR Obligation

    If previous year tax is under paid then you need to consider your obligation under MLR.

    I agree with previous poster that is not your responsibility to repair but however if it is wrong and tax is under paid, I think you have to advise your client to file correct return and pay correct tax.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    Agree regarding the MLR obligations - if he has underpaid, and is told he has to pay the correct amount, and doesn't, then a report may be required.

    By the sounds of it, you will need to quote for 0708 spearately, and it will likely cost the same had you done it in full in the first place - don't underestimate how long 'repairs' take to do!
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Yes, thanks for that advice. I will set up another meeting with him and "have a chat".
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