Barely any payroll records
Options
jilt
Registered Posts: 2,903 Beyond epic contributor 🧙♂️
Scenario - 6 tax returns to file for the same client. Some paperwork missing but fortunately have details of all sales invoices and have worked with what purchase invoices I have and bank and credit card statements. Main problem is payroll.
I only have a few payroll summaries for some of the years in question showing the tax and NI due to HMRC only, no gross pay. The only other info I have is a list of all cheques written since December 2004, but this obviously only shows me the net pay. I can see that the annual return for tax year 2008/09 was filed but not sure since, and am presuming they were filed prior to this date. I was thinking of requesting any copies of P35s filed for the six years I'm doing but again this will only show me tax and NI due to HMRC.
What would you do in this case, do I add up all the cheques to staff and add on part of the NI, although not got the details for every month. I really don't want to have tick the box to say that there are estimated figures within these tax returns as I'm sure it will prompt an inspection but I can't see any other way around it.
As he's a sole trader I wondered if I could just do a trading account showing the profit made on his tax returns using the figures I can verify. If it means he misses out on some expenditure and pays more tax there's not a lot I can do about it really. Problem is this client owes SA tax, VAT and PAYE and really needs a balance sheet but I'm worried that any balance sheets I produce won't be accurate enough. And I'm not sure I can meet Tuesday's deadline.
Any suggestions or advice would greatly appreciated before I have a nervous breakdown.:scared:
I only have a few payroll summaries for some of the years in question showing the tax and NI due to HMRC only, no gross pay. The only other info I have is a list of all cheques written since December 2004, but this obviously only shows me the net pay. I can see that the annual return for tax year 2008/09 was filed but not sure since, and am presuming they were filed prior to this date. I was thinking of requesting any copies of P35s filed for the six years I'm doing but again this will only show me tax and NI due to HMRC.
What would you do in this case, do I add up all the cheques to staff and add on part of the NI, although not got the details for every month. I really don't want to have tick the box to say that there are estimated figures within these tax returns as I'm sure it will prompt an inspection but I can't see any other way around it.
As he's a sole trader I wondered if I could just do a trading account showing the profit made on his tax returns using the figures I can verify. If it means he misses out on some expenditure and pays more tax there's not a lot I can do about it really. Problem is this client owes SA tax, VAT and PAYE and really needs a balance sheet but I'm worried that any balance sheets I produce won't be accurate enough. And I'm not sure I can meet Tuesday's deadline.
Any suggestions or advice would greatly appreciated before I have a nervous breakdown.:scared:
0
Comments
-
What would I do?
Run away very far indeed.......
Apologies as thats not very constructive, however it sounds like this client is taking the proverbial - no SA, VAT or PAYE for the last six years? Not sure i would want my name associated with the fallout from this no matter how much of a fat fee offered in advance (which I hope you have had).
.......your last paragraph is a good starting point, you can only work with the info given and it sounds like you have done a tremendous job so far given the length of time you have gone back. Moneysoft Payroll manager has a Net Pay to Gross calculator that may be of some use - you can download it free for 30 days so will allow you time to play about with it. You are still going to be using estimate figures though as you don't have employees tax codes.
Hopefully someone else more experienced will come along and offer up some advice.
Good luck!
Ken0 -
If you add together the net pay paid and the PAYE/NI paid then you'll come back to Gross plus E'ers NI you just won't know the split between the gross and NI.0
-
however it sounds like this client is taking the proverbial - no SA, VAT or PAYE for the last six years? Not sure i would want my name associated with the fallout from this no matter how much of a fat fee offered in advance (which I hope you have had).
This point of view always intrigues me. I can't see what's wrong with acting for someone who wants to get straight. I'm the one helping them get back on track and bringing things up to date. That's got to be a good thing, right? I honestly have no issues taking on clients like this as long as they agree to be straight with me, be prompt and efficient, and pay up front/ on time. As far as HMRC are concerned, I'm helping them pay their taxes. That's got to be brownie points, surely?
Agreed. 12Pay which we use also has net to gross........your last paragraph is a good starting point, you can only work with the info given and it sounds like you have done a tremendous job so far given the length of time you have gone back. Moneysoft Payroll manager has a Net Pay to Gross calculator that may be of some use - you can download it free for 30 days so will allow you time to play about with it. You are still going to be using estimate figures though as you don't have employees tax codes.
The thing to remember is you can't make a silk purse out of a sow's ear - you can only do the best with what you have.
Start at the beginning, and work through it.
At the end of the day, the thing to say to HMRC when you get there, is that they are trying to put it right, and you are doing the best you can with the info available, and they are now actually getting tax from him. That's better than him leaving the country or otherwise doing a runner.0 -
Thanks for the comments guys. I've got Moneysoft, didn't realise it had a net to gross calculator. I do have a few copies of payslips so have some tax codes. I'll finish my other clients first then continue with his.
Do you think a covering letter with the 5 earlier tax returns will be sufficient? Do you think it will prompt an inspection? I was actually wondering if I could still file any of the previous years with ftax, I'll have a look.0 -
This point of view always intrigues me. I can't see what's wrong with acting for someone who wants to get straight. I'm the one helping them get back on track and bringing things up to date. That's got to be a good thing, right? I honestly have no issues taking on clients like this as long as they agree to be straight with me, be prompt and efficient, and pay up front/ on time. As far as HMRC are concerned, I'm helping them pay their taxes. That's got to be brownie points, surely?
Couldn't agree with you more, I've had many bin bag jobs and actually set my practice up to focus on bookkeeping rather than tax compliance. It is just the length of time in this case that worries me. Why try and sort this all out now after six years - across all the taxes. If it was just one maybe, but VAT and Payroll not catching up with them for so long sets alarm bells ringing.At the end of the day, the thing to say to HMRC when you get there, is that they are trying to put it right, and you are doing the best you can with the info available, and they are now actually getting tax from him. That's better than him leaving the country or otherwise doing a runner.
A thoroughly worthy sentiment and again I admire your comment, but I'm afraid the devil on my shoulder is saying that just because someone is trying to sort this out for them doesn't necessarily mean they are going to pay - tax man, or agent. Of course that may be because I am old and cynical..... ;-)
Jilt - It's the 'bullseye' type icon that is the net to gross calculator on Moneysoft.
On a not entirely unrelated note, I've recently switched from Sage Payroll to Moneysoft Payroll and it is quite simply superb! I've found nothing it can't do yet and has reduced my processing time by about 90%.0 -
Thanks Ken, I'll go look for the bullseye!
Fortunately this guy has family who help him out financially so both me and the taxman will get paid. He almost had a nervous breakdown about 7 years ago and this is a great step forward for him. Hopefully things will improve this year and he'll turn a corner. I already knew the guy before he approached to do his accounts, not a friend but an aquaintance. I won't be charging as much as I should be, but I do believe in you reep from what you sow. My client base is grwoing every week and if I can help out with a few 'charity' cases now and again I think it's a worthwhile thing to do, as long as my other clients don't suffer becasue of it.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 18.9K For AAT students
- 268 NEW! Qualifications 2022
- 147 General Qualifications 2022 discussion
- 9 AAT Level 2 Certificate in Accounting
- 44 AAT Level 3 Diploma in Accounting
- 65 AAT Level 4 Diploma in Professional Accounting
- 8.9K For accounting professionals
- 23 coronavirus (Covid-19)
- 274 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.3K General accounting discussion
- 194 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 352 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 590 Job postings
- 17 Who can benefit from AAT?
- 36 Where can AAT take me?
- 44 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 65 AAT membership