Tax and Limited Company - HELP PLEASE!!

[IyaCiara]

Hello All.

Need advice desperately. Just found out that my husband has not declared earning from his ltd. company when he filled his self assessment (end of Jan one I think?).

Anyway, in short he started contracting in Jan 08, initially on PAYE. Then he switched to Ltd. Company and started invoicing for the work that he was doing.

He was paid into his personal account instead of his business account and just spent the money as if it was all his!

I found an accountant for him in Jan. 08 but it now transpires that he has never used this man (very reputable). Instead he switched to a cheaper gangster type accountant who advised that there was no need to declare the earnings that were paid into his personal bank account. Now, I'm no financial genius, but this can't be right??

So, now I need to know what course of action to take next because I definitely don't want us to have any problems with HMRC. What should we do? Any advice would be welcome.

Note, I only found out about all of this because my husband is currently out of work and was reluctant to claim JSA. Of course now I know why.

Thanks in advance for your help.

[jholden]

Go back and see the reputable accountant.

[IyaCiara]

To be honest, that would be the best solution. But can't afford to pay this accountant now because husband isn't working and doesn't have any savings. As I mentionned on previous post, this whole situation only came to light when I was pressuring him to sign on.

[DFL]

The question is not whether you can afford to pay one, it's whether you can afford not to.

This appears to be a small piece of work, have a consultation with one and explain the position, they may be willing to accept payment by instalments.

If you fall foul of HMRC this could be money and worry saved in the long run.

[IyaCiara]

Do you think that there are accountants out there who would accept payments by installments and also, will HMRC accept installments on any tax owed?

thanks for your replies!

[DFL]

Well we do so if the circumstances warrant it and im sure that many others would.

HMRC would also support and should accept payment by instalments on the proviso that you were up front and seen to be trying to put things right. Interest would be charged though so may be worth borrowing from elsewhere to lessen or avoid the interest charge.

There may not even be any additional tax owed depending on the circumstances but all does need to be declared.

[IyaCiara]

Again, thanks for the advice.

Next question - if there is anyone on here who would be willing to help us to sort things out on the basis that we can only pay in installments can you please let me know.

To give you some more information - my husband is an IT contractor who was earning aprox. £600. None of this money has been declared and the majority, if not all was paid into his personal bank account. We live in South London, so someone local who can help us out would be ideal.

Also, can you give me an indication of the cost involved please?

[DFL]

I see that David of Farrant Frost has offered on other thread, you could do a lot worse, they (FF) have excellent rep on here and are always very helpful.

[dp0848]

Thanks Jason.

[Finansol Ltd Tax Software]

Keeping this short so I don't repeat what others have said:

1. There's more chance of minimising any tax penalties if he discloses to HMRC voluntarily, ie before they discover anything wrong.

2. HMRC have a new Business Payment Support Service - to help businesses spread tax payments. Of course, any arrangements will attract further interest, ie in addition to interest already due.

3. I hope (for your husband) that he was not also charging VAT, and banking that? (I assume you meant £600 / week, and he did not register voluntarily.)