From day one of our business, we have specialised in solving small business tax problems. The UK tax system is very complex and the guidance HMRC issues is very general and often misleading.

If you are faced with a letter (and it will always be a letter) from HMRC saying you owe tax, then please do not ignore it. The best course of action is to call an accountant (one with experience of dealing with the matter you are faced with) and start sorting it out. Do not stick your head in the sand as it won’t go away.

This last post in our series is a collection of client success stories on how we solved the tax problems they were presented with.

Let Property Campaign (Undeclared Rental Property Income)

• We have completed many let property campaigns where owners renting out a second property, have not realised they needed to pay tax on the earnings they made. Two clients had over 7 years of tax outstanding to report and a large amount to pay, but we were able to ensure the correct penalties were applied and reports were filed to help them both sleep well at night and get back on the right track for filing regular tax returns annually to report this income.

Construction Industry Scheme Requirements

• Not reporting and paying Construction Industry Scheme tax is a very common mistake that many new construction and trade businesses make. Two of our clients received fines of £3,000 and £2,000 from HMRC for failing to declare on time and pay the correct 20% tax from their sub contractors to HMRC. As you can imagine this was very stressful for these small businesses who genuinely got confused on the process, having been sub contractors themselves.
• Luckily, we were able to appeal both fines and have them corrected to zero. This made a big difference to both of our clients and it was our experience with having dealt with these appeals and the behaviours we could help our clients learn about, that ensured they didn’t have to pay these penalties.

Child Benefit

• Not filing a tax return due to child benefit is another example where people do not realise or remember, that if your gross income exceeds £50,000 and either you or your partner who you live with are receiving child benefit, then you will need to file a tax return  for the year you have exceeded the income and pay back a portion of your child benefit until your income exceeds £60,000 when the whole child benefit received must be paid back.
• This is not a combined household value so two parents could be working and earning £49,000 each and they would still receive the child benefit, however one parent could be earning £51,000 and they would need to start paying a portion of it back via their annual self assessment.
• A client of ours received a letter from HMRC asking them to pay back child benefit due to their earnings and due to challenging personal circumstances they were unable to deal with this on their own, opting to pay the amount HMRC requested. This however didn’t solve the problem as self assessment returns still needed filing which is where we got involved.
• We were able to work with the client and appeal the £2,000 fine received for late filing penalties, which after four tax return filings, were all cleared.  This was a great relief to them and allowed them to concentrate on more important matters in his personal life.

It’s also worth mentioning that our team have helped hundreds of clients each year pay the correct amount of tax and file their returns on time, all in a professional and friendly manner.

If you are looking for solutions to your accounting and taxation problems, please get in touch.