(Who) should we ask for help with a UK tax dispute?
December 7, 2016 12:37 PM Subscribe
[UK tax filter] My boyfriend has been audited by the government on his 2014-15 tax returns, and his ex-company is withdrawing accounting support. The specific problem is with his account containing overseas income that he was getting tax relief for. Can you give us some advice on the situation and/or who to ask for help?
My boyfriend (Canadian citizen) is currently studying in the US, but he was based in London until mid-2015 working for a large multinational company, and so his 2014-15 taxes were duly filed. Because of the nature of his job (lots of international travel) the company helped him apply for overseas workday relief on the income received in his bank account based in Jersey (I believe his company did the whole bank account/tax relief setup - he came to the UK with a job offer from them). However he was audited recently and the HMRC is saying that his Jersey account had received non-income-related remittances (mostly small amounts from friends), which disqualifies it as an account under special mixed fund rules, and asked for a revised remittance computation. The deadline was early December for that.
Up till this point, his ex-company had been paying for accounting services but he's just been told they'll be withdrawing support, literally right at the HMRC deadline. They oh-so-graciously agreed to pay for the application of a deadline extension until early January but he still has to either find another accountant ASAP or manage this whole tax mess himself... which he isn't in the best position to do, being overseas and completely freaking out over exams.
After some frantic Googling, my understanding is that even though those remittances from friends disqualifies his account from using "special mixed fund rules" theoretically he should still be able to claim OWR/tax relief on all the employment-related income in that account. It's just that instead of being able to do one calculation for the whole amount paid into that account, he has to do separate calculations for each transmittance from his company. So he shouldn't be on the hook for the cool £9000 the gov is asking him for. Um, I think?
My questions are thus:
(1) People with more expertise, am I completely on the wrong track with my understanding? Should he just pay up?
(2) What should he do next - try find an independent accountant, or go with an accountancy firm? Do it himself? (How?!)
(3) Given the looming deadline, any recommendations for firms/accountants in the UK dealing with this?
(4) His question: what are the consequences of simply not paying? Would there be ramifications for him in the US? [<-- I don't think this is a good idea, but I'm very risk-averse]
Any advice would be greatly appreciated - thanks!!
My boyfriend (Canadian citizen) is currently studying in the US, but he was based in London until mid-2015 working for a large multinational company, and so his 2014-15 taxes were duly filed. Because of the nature of his job (lots of international travel) the company helped him apply for overseas workday relief on the income received in his bank account based in Jersey (I believe his company did the whole bank account/tax relief setup - he came to the UK with a job offer from them). However he was audited recently and the HMRC is saying that his Jersey account had received non-income-related remittances (mostly small amounts from friends), which disqualifies it as an account under special mixed fund rules, and asked for a revised remittance computation. The deadline was early December for that.
Up till this point, his ex-company had been paying for accounting services but he's just been told they'll be withdrawing support, literally right at the HMRC deadline. They oh-so-graciously agreed to pay for the application of a deadline extension until early January but he still has to either find another accountant ASAP or manage this whole tax mess himself... which he isn't in the best position to do, being overseas and completely freaking out over exams.
After some frantic Googling, my understanding is that even though those remittances from friends disqualifies his account from using "special mixed fund rules" theoretically he should still be able to claim OWR/tax relief on all the employment-related income in that account. It's just that instead of being able to do one calculation for the whole amount paid into that account, he has to do separate calculations for each transmittance from his company. So he shouldn't be on the hook for the cool £9000 the gov is asking him for. Um, I think?
My questions are thus:
(1) People with more expertise, am I completely on the wrong track with my understanding? Should he just pay up?
(2) What should he do next - try find an independent accountant, or go with an accountancy firm? Do it himself? (How?!)
(3) Given the looming deadline, any recommendations for firms/accountants in the UK dealing with this?
(4) His question: what are the consequences of simply not paying? Would there be ramifications for him in the US? [<-- I don't think this is a good idea, but I'm very risk-averse]
Any advice would be greatly appreciated - thanks!!
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I have no personal experience with them, but I did some googling and this firm, called PetersonSims, is a two-person company and one of those person's expertise is in international personal taxes. Their webpage also says they will give you a quote upfront for how much it's going to cost, so your boyfriend could assess from the beginning if he can afford it.
posted by colfax at 12:35 AM on December 8, 2016 [1 favorite]