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Must a disclosure be made if depreciation was not added back?
I act for a reasonably large unincorporated business. While preparing the tax returns for last year I flicked back through the previous ones looking for a particular piece of information.
During my search of the forms and computations for the year ended 5 April 2014 I found that depreciation of £20 000 had not been added back giving an underpayment of tax of £8 000. From everything I can see this was simply an error that was not picked up at the time by my staff myself or the client. The return was submitted in time and HMRC did not raise an enquiry. I have told my client that he must make a disclosure to HMRC about the understatement of profits and that I have a professional obligation to cease to act for him if he doesn’t. He has come back to me and asked me...
