Incorrect P35 FY 2011/12

[v5srv]

Martin,

Helpful - thanks. The error occured in the start-up year for MyCo. No dividends taken until the start of the following tax year so no problems on salary+dividend pushing any thresholds. Was not aware of the 30/01/14 deadline but accountant is now on the case so should comfortably submit correction prior to then.

[Martin at NixonWilliams]

Accountant has recently sent the company accounts for review and I spotted a salary error which I eventually worked out came all the way from the P35 created for 2011/12 which had been incorrectly completed (missed one months salary - same accountant - my problem for not checking diligently). This in turn means that the SA for 2011/12 is also incorrect.

There are no Tax or NI implications. In both cases the total salary for that year (it was a part working year) are below the respective thresholds. Correct course of action would be to amend both the P35 and SA for that year. Would I expect to see penalties? As I like to keep a low tax man profile (nothing to hide - prefer not to be in view) is this correction likely to open any avenues of investigation?

Or do I just let sleeping dogs well alone, plead ignorance if asked in the future and get the accountant to get this years accounts sorted correctly (last years accounts were OK - it's an error that just rolled over to materialise this year).

Thoughts?

If there is no tax or national insurance to pay on the missed salary payment I am almost certain there will be no penalties, though it is possible.

Note that although there may not be any tax or national insurance on the salary payment, the correction to your tax return could push other income into a higher marginal rate of tax. For example, if your (incorrect) salary and dividends were capped at the higher rate threshold (£42,475 for 2011/12), the amendment would push some of the dividends into the higher rate tax threshold.

The deadline for making a correction to your tax return is 12 months from the due date. In your case, this must be done by no later than 31/01/2014.

I hope this helps.

Martin

[northernladuk]

NLUK.

In fact that is the first thing I did. I spotted the error, traced it back, informed the accountant. They have come back with P35 for 2011/12 and SA need to be updated. I them come to the willing band of strangers for a collective cuddle and the wisdom of their opinion. You are obviously not feeling in a cuddly mood tonight!!

LOL, sorry, not the cuddly type I am afraid. Kudos for spotting the error though. I suspect many of us don't check well enough.
Am a bit black and white with accounts. If it's wrong I get the professional I pay to sort it. I wouldn't let sleeping dogs lie either. I would want it sorting properly. Might not incur penalties and all that but I have more to worry about than 'not quite correct' accounts. Saying that if the accountant says don't worry I guess I would want a second opinion from here as well.

[SueEllen]

NLUK.

In fact that is the first thing I did. I spotted the error, traced it back, informed the accountant. They have come back with P35 for 2011/12 and SA need to be updated. I them come to the willing band of strangers for a collective cuddle and the wisdom of their opinion. You are obviously not feeling in a cuddly mood tonight!!

He's never cuddly on here and neither am I.

If your accountant screws up the first job is to ask them about it. If they say their screw up is normal or they come out with other rubbish then come here to make an enquiry.

[v5srv]

NLUK.

In fact that is the first thing I did. I spotted the error, traced it back, informed the accountant. They have come back with P35 for 2011/12 and SA need to be updated. I them come to the willing band of strangers for a collective cuddle and the wisdom of their opinion. You are obviously not feeling in a cuddly mood tonight!!

[northernladuk]

I do struggle to understand why people pay accountants and then won't speak to them when they have problems with their accounts. Yes, the accountant may have messed up but still, the first step is to speak to him and give his version and what his advice would be. If at that point you are unsure or believe he isn't doing it properly then come to a load of strangers for advice.

[Jessica@WhiteFieldTax]

Its unlikely to be a problem, or to generate penalties or raised enquiry profile, but be guided by your accountants advice. If its their error they should sort it out foc, even if you should also have noticed it.

[v5srv]

Accountant has recently sent the company accounts for review and I spotted a salary error which I eventually worked out came all the way from the P35 created for 2011/12 which had been incorrectly completed (missed one months salary - same accountant - my problem for not checking diligently). This in turn means that the SA for 2011/12 is also incorrect.

There are no Tax or NI implications. In both cases the total salary for that year (it was a part working year) are below the respective thresholds. Correct course of action would be to amend both the P35 and SA for that year. Would I expect to see penalties? As I like to keep a low tax man profile (nothing to hide - prefer not to be in view) is this correction likely to open any avenues of investigation?

Or do I just let sleeping dogs well alone, plead ignorance if asked in the future and get the accountant to get this years accounts sorted correctly (last years accounts were OK - it's an error that just rolled over to materialise this year).

Thoughts?