I am sure you can retro-apply for ESC C16. I think we did it once when we inherited a client whose accountant hadn't done it properly and they allowed it.
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Reply to: Capital Gain Tax - Please advise
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Previously on "Capital Gain Tax - Please advise"
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Originally posted by northernladuk View PostI presume you put TRY as it is a last ditch attempt but surely he has to get approval before end of Jan of which is has Bob Hope and also if he gets it Jan his banking says other wise so is wide open to investigation and a fair cop? Surely it is too late for this?
It takes HMRC about a month to reply to ESC letters at the moment, depending on which tax office you apply to.
The expected changes to the ESC could also kick in at any time.
I'd be reviewing engagement letters and emails from the accountant if I were the OP, just to establish if there's any scope for a professional indemnity claim should the worst happen.
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Originally posted by JoJoGabor View PostJust out of interest, is this a well known accountant,or a mate with some knowledge of accounting? there seem to be a few stories around of getting bad advice from accountants at the moment, one reason why I am happy sticking with my well known contractor specialist accountancy co. It's well worth the money
http://forums.contractoruk.com/accou...nt-needed.html
If it's a capital distribution then the accountant has just forgotten to apply for the ESC which you could TRY to do now.
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Just out of interest, is this a well known accountant,or a mate with some knowledge of accounting? there seem to be a few stories around of getting bad advice from accountants at the moment, one reason why I am happy sticking with my well known contractor specialist accountancy co. It's well worth the money
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Originally posted by manish12_79 View PostHi,
I had closed the business in Oct 2010 and had considerable net profit extracted out of business.
I was expecting to pay capital gain tax on this amount shared between me and my partner, paying 10% after entrepreneur relief factored in.
My accountant had not filed for ESC C16. ( this somethign I was not aware of).
Does that mean I will have to pay higher rate tax, or declaring the net proceeds as capital gain on the tax returns for 2010-2011 will be enough ?
What is divident tax rate if I end up that route?
Please advise. I am scared like hell at the moment.
Thanks
Have the accounts been filed at HMRC and Companies House?
If the dividends are all higher rate then you're looking at 25% tax on the net value, unless you go into additional rates in which case it's slightly higher.
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I would imagine worst case to be able top declare the funds under dividend status. Seeing as you closed the Ltd in Oct 2010, the Tax Return for this is due in Jan 2012 (online).
Of course, you would need to have the dividend voucher and meeting notes produced and signed (and probably dated appropriately).
Though as a measure I would seek to find out WTF your accountant was thinking. Perhaps he can retro-apply for ESC16, but if not then report him to the governing body and seek damages.
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Originally posted by manish12_79 View PostI did ask the accountant then. But was not advise on filling the ESC.
Declaring it as Capital gain on tax assessment now is not enough ? Can i file ESC now ?
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Originally posted by northernladuk View PostWell if you have taken the money out without issuing a dividend voucher you have paid yourself an illegal dividend which I believe will be counted as PAYE. See how THAT scares you. Can't see how you can call it capital gains without ESC.
You could of course fill the divi paperwork in now but IANAA.
Did he forget to put the ESC in or did you no ask him to?
Why did you assume you could only pay capital gains on it when you pulled it all out without doing anything about it. Did you not ASK your account first as that is what he is paid for??
Have you not asked him now? It is his job to advise you on such issues.
Declaring it as Capital gain on tax assessment now is not enough ? Can I file ESC C16 now ?
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Can you not take your accountant to the cleaners for negligence ?
I dunno - just putting it out to the forum
How much will / could it cost you ?????
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Well if you have taken the money out without issuing a dividend voucher you have paid yourself an illegal dividend which I believe will be counted as PAYE. See how THAT scares you. Can't see how you can call it capital gains without ESC.
You could of course fill the divi paperwork in now but IANAA.
Did he forget to put the ESC in or did you no ask him to?
Why did you assume you could only pay capital gains on it when you pulled it all out without doing anything about it. Did you not ASK your account first as that is what he is paid for??
Have you not asked him now? It is his job to advise you on such issues.Last edited by northernladuk; 29 November 2011, 23:11.
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My understanding is that you do need to apply for the ESC C16 although I have been told by my accountant that this may disappear soon.
BTW - dividend are spelt with a "d" at the end, not a "t"
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Capital Gain Tax - Please advise
Hi,
I had closed the business in Oct 2010 and had considerable net profit extracted out of business.
I was expecting to pay capital gain tax on this amount shared between me and my partner, paying 10% after entrepreneur relief factored in.
My accountant had not filed for ESC C16. ( this somethign I was not aware of).
Does that mean I will have to pay higher rate tax, or declaring the net proceeds as capital gain on the tax returns for 2010-2011 will be enough ?
What is divident tax rate if I end up that route?
Please advise. I am scared like hell at the moment.
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