HMRC Penalties

[conqurer]

Does anyone know if there are severe penalites for having any discrepancy between company bank statements and annual accounts?

Regards.

[Diver]

Does anyone know if there are severe penalites for having any discrepancy between company bank statements and annual accounts?

Regards.

Is Prison classed as a severe penalty?

HTH

[NotAllThere]

Prison is only an option if the discrepency is deliberate.

I had a discrepency in my company accounts, because I'd paid in a refunded tax overpayment, and neglected to tell my accountant about it.

What is the discrepency?

[BrilloPad]

Prison is only an option if the discrepency is deliberate.

I had a discrepency in my company accounts, because I'd paid in a refunded tax overpayment, and neglected to tell my accountant about it.

What is the discrepency?

where did you pay it into? company bank account?

[NotAllThere]

Into company bank account. Just a few hundred. My accountant spotted it, and asked me where it had come from.

[BrilloPad]

Into company bank account. Just a few hundred. My accountant spotted it, and asked me where it had come from.

Then why do HMRC need to know? The accountant spotted it and put it into the accounts? If accountant did not spot it then isn't it their mistake and their problem?

Effectively the accountant has done their job here. What am I missing?

Accountants can smooth most things over. I was technically trading while insolvent once - accountant sorted that out. As a "personal services company" no-one was ever going to lose out.

[Sockpuppet]

Depends how large the difference is.

If its sub £50 don't worry and just put a transaction in the make them match.

If its more then look for it. I secerly doubt that Tesco or Asda's accounts are penny perfect.

[NotAllThere]

What you're missing is that the original post about HMRC was by conqurer, not by me.

What I'd like to know from conqurer is the nature of the discrepency, and why it can't be sorted out by his accountant. And, as you point out - what's it got to do with HMRC?

[Turion]

As always the best advice is to consult your accountant. Otherwise you need to keep the 'rogue' amount off your books. Again may be difficult if your accountant reconciles your books with your bank statement. The longer you leave it the more chance of trouble. Closing the company is another way of erasing the problem.

[malvolio]

Depends how large the difference is.

If its sub £50 don't worry and just put a transaction in the make them match.

If its more then look for it. I secerly doubt that Tesco or Asda's accounts are penny perfect.

Spot the guy that's never worked in accountancy...

A £50 discrepancy in a £1m ledger could be two not-quite matching £900k discrepancies. You have to track them down and reconcile (or explain) to the penny. I've spent a few days doing that job in the past. Also a key audit point in any company's books is that the cash ledger (or net balance of available cash) will match precisely to the bank account at the same point in time. The FD will be very nervous if they don't.

All the monies going through the books must be auditable and accountable, that basic principles. How you fund it is another question of course.

As to how it interests HMRC, if you misrepresent your cash position they will assume you may be concealing profits and hence evading tax, or you may be laundering monies on behalf of a third party. Neither option is desirable!