A cautionary tale of self assessment tax returns!

April 17, 2020

Thinking about doing your own tax return? Even if you have an accountant…?

You might save yourself a bit of money. We don’t insist that we do it, but we do ask that you think about it seriously. As with other types of DIY, it may end up costing you more in the long run.

Things can go wrong. Here’s a cautionary tale:

Our client, Company A, has been taking dividends for years. The rules changed a few years ago, and although we advised the client, it passed him by. He also purchased a buy-to-let but didn’t tell us.

Company A was only using us for basic services for their business. We didn’t have a regular catch-up where things would have come up in conversation and we’d have been able to provide the appropriate advice. He told us his did his own returns, but the reality was, he didn’t. He didn’t think he needed to!

Four years later we’ve picked it up. It’s a straightforward job for us and not an expensive one for Company A. Not expensive in terms of our charges, that is. However, in addition to the unpaid tax, our client is going to have to pay, he’s now looking at penalties as well. Penalties could be substantial – up to 100% of the tax due. We’ll work to get this reduced, but he’s still looking at a hefty penalty of some kind.

This could so easily have been avoided and I’d hate to see it happen again to Company B, C or D. We need to keep in touch and catch up regularly. And let us do your tax return; it will save you in the long run.

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