A recent first tier tribunal appeal highlighted a case where an individual purchased an off the shelf company in 2000 from an online Accountancy provider with the intention of splitting the shares between him and his partner.
He expected that this was all dealt with by the Accountant who submitted accounts and returns and they paid their tax on this basis.
In March 2011 HMRC investigated a difference between dividends declared on his tax returns and the shareholdings declared at Companies House. He contacted his online Accountant who gave him verbal confirmation that there were two shares held in the names of him and his partner but the paperwork did not support this assertion.
But HMRC relied on the information filed at Companies House and it was held that all the shares were held by him so all the dividends from the company should be declared on his tax return. Assessments were raised for underpaid tax and penalties applied for careless errors!
It is clear that there was a misunderstanding between the client and online Accountancy provider. But this is the risk you run when you go with a mass-market online Accountant where the staff rarely have time to pick up on this sort of thing or even to become familiar with your company.
The service offered by us is the polar opposite of the online Accountancy market – we work with a small portfolio of businesses that we know well. We work in partnership with you and face to face contact and regular dialogue is essential.