Reply to: HMRC Penalties

[BrilloPad]

Well if he did his ex has got £200 of it in her trousers now

£400 . and all my wages from my time there. and even all the biros I pinched.

[TheFaQQer]

Apparently it was something similar that almost brought Airtours down. I heard they did their accounts on a spreadsheet and never bothered reconciling the bank account, hence the massive black hole!

The run Oracle Financials. Not sure I'd describe it as a spreadsheet

[miffy]

...And trousered the remaining £400

Well if he did his ex has got £200 of it in her trousers now

[Turion]

I worked for a norwegian computing company in 1983 as a holiday job in accounts firm - the previous year their bank reconciliation was out by £800. I found half of it (by luck).

...And trousered the remaining £400

[BrilloPad]

Spot the guy that's never worked in accountancy...

A £50 discrepancy in a £1m ledger could be two not-quite matching £900k discrepancies. You have to track them down and reconcile (or explain) to the penny. I've spent a few days doing that job in the past. Also a key audit point in any company's books is that the cash ledger (or net balance of available cash) will match precisely to the bank account at the same point in time. The FD will be very nervous if they don't.

All the monies going through the books must be auditable and accountable, that basic principles. How you fund it is another question of course.

As to how it interests HMRC, if you misrepresent your cash position they will assume you may be concealing profits and hence evading tax, or you may be laundering monies on behalf of a third party. Neither option is desirable!

I worked for a norwegian computing company in 1983 as a holiday job in accounts firm - the previous year their bank reconciliation was out by £800. I found half of it (by luck).

I guess standards are different these days...

[philip@wellwoodhoyle]

Spot the guy that's never worked in accountancy...

A £50 discrepancy in a £1m ledger could be two not-quite matching £900k discrepancies. You have to track them down and reconcile (or explain) to the penny. I've spent a few days doing that job in the past. Also a key audit point in any company's books is that the cash ledger (or net balance of available cash) will match precisely to the bank account at the same point in time. The FD will be very nervous if they don't.

All the monies going through the books must be auditable and accountable, that basic principles. How you fund it is another question of course.

As to how it interests HMRC, if you misrepresent your cash position they will assume you may be concealing profits and hence evading tax, or you may be laundering monies on behalf of a third party. Neither option is desirable!

Apparently it was something similar that almost brought Airtours down. I heard they did their accounts on a spreadsheet and never bothered reconciling the bank account, hence the massive black hole!

[malvolio]

Depends how large the difference is.

If its sub £50 don't worry and just put a transaction in the make them match.

If its more then look for it. I secerly doubt that Tesco or Asda's accounts are penny perfect.

Spot the guy that's never worked in accountancy...

A £50 discrepancy in a £1m ledger could be two not-quite matching £900k discrepancies. You have to track them down and reconcile (or explain) to the penny. I've spent a few days doing that job in the past. Also a key audit point in any company's books is that the cash ledger (or net balance of available cash) will match precisely to the bank account at the same point in time. The FD will be very nervous if they don't.

All the monies going through the books must be auditable and accountable, that basic principles. How you fund it is another question of course.

As to how it interests HMRC, if you misrepresent your cash position they will assume you may be concealing profits and hence evading tax, or you may be laundering monies on behalf of a third party. Neither option is desirable!

[Turion]

As always the best advice is to consult your accountant. Otherwise you need to keep the 'rogue' amount off your books. Again may be difficult if your accountant reconciles your books with your bank statement. The longer you leave it the more chance of trouble. Closing the company is another way of erasing the problem.

[NotAllThere]

What you're missing is that the original post about HMRC was by conqurer, not by me.

What I'd like to know from conqurer is the nature of the discrepency, and why it can't be sorted out by his accountant. And, as you point out - what's it got to do with HMRC?

[Sockpuppet]

Depends how large the difference is.

If its sub £50 don't worry and just put a transaction in the make them match.

If its more then look for it. I secerly doubt that Tesco or Asda's accounts are penny perfect.

[BrilloPad]

Into company bank account. Just a few hundred. My accountant spotted it, and asked me where it had come from.

Then why do HMRC need to know? The accountant spotted it and put it into the accounts? If accountant did not spot it then isn't it their mistake and their problem?

Effectively the accountant has done their job here. What am I missing?

Accountants can smooth most things over. I was technically trading while insolvent once - accountant sorted that out. As a "personal services company" no-one was ever going to lose out.

[NotAllThere]

Into company bank account. Just a few hundred. My accountant spotted it, and asked me where it had come from.

[BrilloPad]

Prison is only an option if the discrepency is deliberate.

I had a discrepency in my company accounts, because I'd paid in a refunded tax overpayment, and neglected to tell my accountant about it.

What is the discrepency?

where did you pay it into? company bank account?

[NotAllThere]

Prison is only an option if the discrepency is deliberate.

I had a discrepency in my company accounts, because I'd paid in a refunded tax overpayment, and neglected to tell my accountant about it.

What is the discrepency?

[Diver]

Does anyone know if there are severe penalites for having any discrepancy between company bank statements and annual accounts?

Regards.

Is Prison classed as a severe penalty?

HTH