But if you are filing a SAR are you allowed to file the tax return as this may mean you carrying out an act which could be a money laundering offence, or is the report nothing to do with the return?
I maybe wrong but I thought you needed consent from NCA before continuing to work for the client
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I got my answer regarding informing HMRC on doing a search about submitting a tax return. I dont inform them on the tax return, leaving the NCA to do that.
It is just a gut feeling regarding the suspicious activity, I have no factual evidence to support it, but suspicion is enough to file a report.
Would be interesting to hear others thoughts on filing the return. The accounts themselves look ok, but based on something that happened last year (which I accepted as a mistake by the client) it is possible that the client has tried to prevent me seeing if the same thing has happened this year. On the other hand I could be wrong, I simply don't know.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John
Sorry, I know this response is late - was the deadline 31st January just gone are are you working towards this tax year end?
Ideally more info required, but understand that is difficult with the potential for anonymity to be lost. So it depends on whether it is IMpossible for him to prove he is not hiding something eg via access to something is now denied to him/closed/no longer available/unretrievable? Although as we know, generally speaking there are ways round most things. So it might be down to how you ask him for the info you need - you may need to instruct him how to get it/that you cannot complete without it.
If there is an error in his tax return then you have to report and disengage.
It was for 2016/17. On the surface, the tax return income and expenses don't raise any suspicion, although income and expenditure are well down on the previous year. He notified me he was struggling in previous conversations, so in itself that's also fine. However, the previous year there was income in the business account that didn't have invoices to match, so I added it. For 16/17 very little has gone through the bank account, and he claims the invoices were paid in cash. I have nothing other than a suspicion that there was more income than he's declared, but can't prove it.
I have filed based on the accounts he has provided and signed as being accurate, mainly because there was two days to go and because he is responsible for those figures. There was something I read from HMRC that I believed allowed me to do so, but it's on my other laptop so can post the link when I get back in the office tomorrow.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
So I guess you have a couple of options/considerations.
- at least the expenditure has reduced - are his margins in line with previous years?
- why has the method of payment changed - ok, some cash payers is ok (if you know about it), but if say before his cash payers represented say 10%, but now they represent 90% of his customers then what has prompted the profile change? This can prompt the - how can he/will he justify that in the event of an inspection (and that, as you know, HMRC err on the side of he will have received more, until he can prove he hasnt)
- Has his lifestyle changed? If he is earning less than before is he still living it up?
Be good to see that link.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
The link may be a bit tenuous, I don't know, but as long as consent is not required, section 9.1 says you can continue acting for the client in the normal way, which in my case meant submitting the tax return. Apologies as I said the link was from HMRC. I was on the gov uk website and it said further info for accounting professionals and took me to ICAEW and from there to the link.
Turnover and purchases are a very similar percentage (2.5% between the ratio's) motor expenses are higher as a percentage but considerably down on last year.
It is the cash ratio that has aroused my suspicion (and it is only a suspicion) because last year nearly everything went through the bank account, this year hardly anything has. I pulled him up last year on the fact that there was a lot more in the bank account than he had invoices for but I do know he's not the brightest tool in the box when it comes to admin (and I don't mean that unkindly) so assumed he'd done a job, banked it, but didn't raise an invoice for it.
He's not near me so can't comment on his lifestyle but I asked how he was managing to live on the income received and he said he was living with someone. That's feasible as he did move last year. I also queried why hardly anything had gone through the bank and he said he'd been paid in cash for a lot of the jobs he'd done.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Been having a read up myself and I agree with what you say that it seems that for the circumstances you describe then filing the Tax return is fine as you will not need to get consent
I was under the impression (wrongly) that you always needed consent from the NCA to continue to act after filing a SAR.
Here is a link to the most recent AML that I could find from CCAB, worth keeping as it has got some fancy diagrams, consent is covered in 6.3.2
) should I also mention it on the white space in the tax return as well?
