Final Tax return for terminally ill friend

[PJD]

Hi all

I was wondering if someone could help me out please.

A very good friend of mine is terminally ill with cancer and has at most a couple of months left. Before he became ill he was a self employed builder.

I have offered to sort his tax return out for him, which I am more than happy to do and have the ability and confidence to carry out. The only thing I don't have is the experience as I've only done a couple of paper ones.

He has given me a file full of receipts and a book simply detailing income and expenses which I need to populate. I am going to do this and submit online by the end of the month.

As this is a final return can anybody give me any advice. He mentioned that he hadn't reclaimed any depreciation on the two cars he has owned over the past 7 years, I don't know how to deal with this. I was going to ask a practicing accountant to double check it all for me but he has let me down.


Any advice would be really appreciated as I'm planning to hopefully do this at the weekend.

Thanks all.

[Williams lester]

Has he been claiming a mileage allowance in the past years? Have the cars been used in the business?

[Zeno]

Given the circumstances, I would imagine most accountants would be happy to give an hour of their time to look over your workings. You could phone around.

Just a few points to get you started -

1.Did he work within the CIS scheme?
2. Was he Vat registered?
3. When did he cease trade (stop working)?
4. Has he completed his own tax returns prior to this?

[frauke]

I'm sorry to hear about your friend. This may not be as simple as you think.

Presuming this is the 2007/08 return.
1. Did he stop trading after 05 April 2008. If he did not, then there will be another tax return. If he did, then you must make it clear on the return the final date. (There is a box for this).
2. You can't claim depreciation. You may be able to claim Capital allowances, but on Cars this is limited to 25% or £3,000 (less private use) - that is presuming as William asked - he did not claim mileage allowance.

Are you completing the short s/e return or full s/e return?

Have you have already registered etc, to complete the return online? You will need to do this or you will not be able to submit it online.

[two sheds]

Another point to bear in mind is what was his year end? If it was anything other than 5th April there may be overlap relief to consider and the period of account to be completed may be longer than a year

Julie

[PJD]

Hi, thanks for the responses. I've answered in turn below.

He stopped trading at the end of July so there will need to be another return submitted. I was hoping to avoid this as I'm sure it's the last thing his family will want to think about but I'll do my best to get it sorted out.

I've just checked the box of papers he has given me and there are just expense receipts, no details of income. What normally happens with builders? I guess I just need to ask him for a copy of all of his invoices covering the tax year 07/08.

What is overlap relief, how does that work?

As for claiming mileage allowance, there are lots of receipts for fuel, no more details other than that. I get a bit stuck on capital allowances so any further guidance would be appreciated. I know he has owned two cars over the past 7 years and has used them both for both business and personal use. I think they have both been second hand.

I have the paper return form from HMRC and was going to work my way through that, is there an easier option?

I have just registered to submit his return online, thanks for the tip, didn't realise it would take 7 days for an activation key to come through.

Yes he did work within the CIS scheme, I haven't even begun to think about that yet. He's given me some print outs showing his details as a subcontractor and the gross, amount liable to deduction, tax and net figures. What would you normally do with these?

I believe he did his own returns before this. He is not VAT registered.

Thanks again for all your help, this is all very much needed and appreciated.

Regards

[MyAccountantOnline]

I do have the greatest sympathy for you, and you are truly being a fantastic friend helping this man out, but would you possibly be best getting a good local accountant to help/deal with this?

I am certain you could find someone. If you were to sort out the records as best you can and maybe draft some accounts it wouldnt be a huge job for an accountant.

I mean no disrespect whatsover as you are clearly trying to help your friend.

[PJD]

Thanks for the reply.

That is what I am going to try to do. I want to prepare everything and do as much as I can and then I will get a colleague of mine to check everything through to make sure that it is correct and then get it submitted before xmas.

At the same time though I want to learn how to do it all properly so I guess am also using as an opportunity to fill in gaps in my knowledge. I have lots of accounting experience but it's all with big multi nationals and I've never had an opportunity to get into the details of something like a tax return.

[Zeno]

The best thing you can do for your friend is to get his records into good order - prepare summaries of his income & expenditure, reconcile his bank account if applicable then take the lot to an accountant. To be frank, unless your collegue is a practicing accountant, they won't know much more than you about self assement.

This will be the best way to help your friend. The accountant will know all the allowances and such to claim so will likely save your friend enough money to cover any fees.