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bigduckontax
bigduckontax, Accountant
Category: Tax
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A gentleman friend of mine has been running as small sole

Customer Question

A gentleman friend of mine has been running as small sole trader business for approx. 6 years, but has not kept accounts or submitted a tax return to the inland revenue. He was under the impression that he was below the tax band.
However next month he will be enlarging the business and it e will be above the tax band.
If he gores to his accountant and "comes clean for his mistaken understanding of matters?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The Inland Revenue ceased to exist some years ago on amalgamation with HM Customs and Excise to form HMRC.

Your friend should have advised Inland Revenue/HMRC of his trading activities by registering as self employed when he started. HMRC would have sent him a self assessment tax return to complete at the end of the first tax year. It is quite possible that, if his profit level was below the tax threshold, they would tell him not to bother in future. However, he did not so now he must make his peace with that Department. He may be charged interest on unpaid tax, only fair, HMRC pays interest on overpaid tax, and aslo have penalties imposed for failurt to make returns although these may be waivcd if there has been no loss of revenue. He whould write a letter setting out his profits on an annual basis from when he first set up in business.

If he wishes he may use an accountant for this, but remember that these days their assistance does not come cheap and the bill is likely to be well into the three figures.

I do hope that you have found my reply of assistance.

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