ICAEW fines member for improper tax claims
An ICAEW member was severely reprimanded and fined £32,500 for submitting and later amending a personal self assessment tax return that he knew included improper claims against self employed income, or should have known he could not claim those amounts.
The Hertfordshire accountant, submitted the return for the year ended 5 April 2011, according to the ICAEW’s October disciplinary report.
On the return, he had said he was both employed by an accounting firm and self employed with his new firm. At the time covered by the return, however, it was just being set up and not yet trading.
On the return, he claimed £13,500 for payments to his wife, who he said was employed to help him in both his employment when he worked from home, and in his self-employed role. His wife, a hairdresser with no accounting experience, also gave evidence at the hearing, while his employers said they had not asked him to work from home and did not condone him paying his wife to help him.
He also claimed £2,358 in fixed asset claims.
The ICAEW took the view that he should not have made these claims as he was not self employed at the time, and pre-trading expenditure could only be claimed once the trade commenced and not before. In addition, it ruled that the deducted expenses were not incurred wholly and exclusively for the purposes of the business.
In his defence, the accountant said he genuinely believed he was entitled to claim the expenses as he did, whether as an employee or in self employment.
However the disciplinary tribunal found that he “seriously misconducted” himself by knowingly making improper claims in a tax return.
In mitigation, the committee took into account his relatively young age, current family circumstances and that the amounts in question were “relatively small”. But it said his dishonesty was an aggravating feature and fined him £2,500, with costs of £30,000 to pay.
Source: accountingweb- ICAEW fines member for improper tax claims
