I need some advice please

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gsauny21
gsauny21 Registered Posts: 16 New contributor 🐸
in General accounting discussion
I have a bit of a problem that I some need advice with.

I'm currently finalising a year end set of accounts for a client who runs a B&B, this year when I collected the paperwork my client handed me a bunch of invoices dating back to 2005. 2008 and 2010 for plumbing works that had been carried out on the property. The comment I received from my client was that the plumber told them he would delay the invoices to keep his turnover below that of the VAT threshold. I explained to them the issues I have regarding this and was left with the impression my clients did not know or understood what the plumber was doing until they received the total invoice in January this year. (The final invoice settled was £14k)

My problem is,

1, the plumber is clearly avoiding tax by invoicing in this way therefore, what’s the correct course of action I should take when notifying HMRC.

2 Can I allow these expenses into the accounts?

Any help will be great; I can’t let the plumber get away with this as its wrong on so many levels (If he has an accountant I would be surprised!) and unfair to my clients if they can’t claim the expenditure!

Thanks in advance

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  • peaman
    peaman Registered Posts: 123 Beyond epic contributor 🧙‍♂️
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    If the invoice is dated January, I would just include the full expense in this years accounts. If it distorts the figures and HMRC query the expense you can show them the invoice. You would have done nothing wrong. If HMRC then decide to look into the plumbers affairs then so be it.

    The plumber is not your client, so it is not your responsibility to report him to HMRC, but if you want to, HMRC have a helpline & email address for anonymously reporting on tax dodgers.

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