Dealing with Errors Flashcards
A member has discovered an error in the client’s submitted return which is not trivial. What should the member do next?
Consider whether specific authorisation is needed from the client to disclose the error
Your client is reluctant to permit disclosure to HMRC of an error in their tax return, you have advised the client of the consequence s and they have not responded, at what point should you treat the client’s behaviour as a refusal to disclose rather than prevarication?
At whatever time you consider the client to be refusing to disclose
You have cased to act for a client who refused to disclose a tax error to HMRC, what contact, if any, is needed now from you to HMRC?
You should notify HMRC that you are no longer acting for the client
The new adviser of one of your former clients has written to you, the client is refusing to give you permission to disclose any information to the new adviser. What should you do?
Inform the new adviser that permission has been withheld
What are examples of errors?
Fraudulent omission of information from a client’s return
Negligent omission of information from a client’s return
An arithmetical error resulting in relief being claimed twice in a client’s return
Who should you inform first when you discover a possible error in a client’s tax affairs?
The client
A director of one of your clients has informed you of an error, what should you do?
Write to the director who spoke to you to advise full disclosure
You inform your client of a possible omission from a VAT return, they claim there has been no omission, what should you do?
Consider whether you trust your client sufficiently as to continue to act
A client has refused to provide an explanation for an error and you cease to act, is it appropriate to discuss details with HMRC?
No, can notify of cessation to act but must maintain client confidentiality
Help sheet C - dealing with errors, suggests that it is reasonable for advisers to take no action to disclose or correct isolated errors in what circumstances?
Where the tax effect of an error is no more than £200
You advise your client to disclose an error to HMRC, the client refuses, what 4 things should you do (in order)?
- Cease to act
- Inform HMRC of withdrawal
- Consider withdrawing reports signed
- Consider money laundering obligations
What should you do if HMRC send an excessive repayment to your client?
Return it to HMRC as soon as possible, the adviser does not require authority from HMRC to return an excessive repayment in this situation
You have informed the directors of your client of an over-repayment of VAT, they have taken no action, what should you do next?
Contact the shareholders
Your client is taking a long time to respond to your advice to disclose an error to HMRC, at what point should you consider this a refusal to make a disclosure?
There is no guidance on this, it is up to you to make a decision
Your client has decided to use another tax adviser in the future, what should you do with the request now you have received for professional clearance?
Freely discuss the client’s affairs provided you have the authority to do so from the client
