Successful negotiation with HMRC saves our client £3,500
Our Client
In 1993 our client, a married couple, set up a trust for their children with £100,000, which was subsequently invested in various unit trusts and bank accounts and has now grown to £135,00 due to the investment income received.
The Problem
Trusts that receive income are required to complete a tax return each year and pay tax at the trust rates (which is the highest rate of tax in each year). Our client however had not advised the tax office of this investment when it was initially set up, or at any point since.
Failing to notify HMRC of the trust and tax returns required carries large penalties, with interest and surcharges due on late paid tax.
Our Solution
We notified HMRC of the trust and submitted the tax returns for the last 10 tax years along with a cheque for the resulting liability.
IN Accountancy negotiated with HMRC on behalf of our client and succeeded in not only reducing our client’s penalty by 70%, but also in agreeing a waiver for any surcharges for the year.
The Result
By discovering this error, notifying HMRC in advance of them finding out, and successfully negotiating with them, we saved our client approximately £3,500 in tax and charges.
