I'm seeing a potential new client next week whose mates have told him they employ accountants to claim expenses from HMRC. He is a steel erector employed on a series of short term contracts under PAYE. His employers don't pay expenses.
I know I can do a Form 87 going back to 2005, but I am anticipating a 'discussion' about home to work mileage. Each new contract will be his place of work, so I don't see how he can claim for travelling, although he should be able to claim for overnight stays. He has worked on oil rigs, so I am comfortable with mileage to Aberdeen, or wherever, but I don't suppose he will have any other expenses for those contracts.
Also, what do I charge? He could easily do it himself, but I know I am charging for my experience etc. He says he has all the paperwork, so it should not take more than 2-3 hours, unless I get involved with chasing HMRC. I don't know the amounts involved, but £150-£200 sounds a lot and could I be charging more than he gets back?
Do any of you good people have any experience of this?
Many thanks
Replies (10)
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Temporary workplace rules
You will have to look at the temporary workplace rules and decide if these apply.
You will need to have a meeting with the steel erection person to get some background information.
Don't base fees on what they get back
A lot of my clients pay tax but I still charge them.
fair enough peter but
if you said to a client i will get you back 800 in tax but it will cost you 1200 would you if you were the client do it - even if the rate is fair there should be a cost benefit check when claiming overpaid tax - unfortunately as you correctly point it doesnt work the other way round
The tax return still needs to be completed and submitted
The tax return would still have to be done correctly.
Consider the law even if there's no money to be refunded.
I didn't think most tax return submissions were voluntary.
not necessesarily
you can use a form 87 for upto 2500 expenses in employment- you nedd to fill in a taxreturn if you exceed that level , you have slightly missed the point
Do you want the work?
This sounds like a variation of a walk-in starting off with, "My friend in the pub got a refund for his expenses".
Do you want the work?
Do you have the background knowledge to deal with the client's requirements or are you prepared to spend time acquiring it?
Why did he approach you and not one of the "mates'" accountants, who clearly deal with that area? There are firms who specialise in accounts and tax for particular sectors.
From the sound of it, this may not be a self assessment case, is there any compunction to claim expenses? carnmores point is correct. If he is not compelled to file, he will not thank you for charging more than he gets back.
You need to -
- establish the facts;
- quantify costs against return; and
- assess, if you take the instruction, whether or not over time it will make you money. A block of six years work would be much cheaper than the work for each of the six subsequent years; would that ongoing relationship be worth it.
Your first step should be to see if the money you will make from a client over time justifies the expenditure acheiving it. There is the time in setting up a client, engagement, money laundering, 64-8 etc, which invariably eats away 2-3 hours which you are not going to recover. So if your budget for one off 6 year claim is 2-3 hours you are getting paid half rate with possibly a minimal job each subsequent year, where you will probably spend as much time billing as you will doing the work.
Been there - got the T-Shirt.....
I am still trying to get fees out of a client for back years mileage claims. The first couple of years resulted in him being refunded more than our fees for the work and he was a happy bunny. This year his repayment fell short of our fees. Six months down the line he has neither signed and returned the paperwork nor paid our fees for the work we have done so far. He is not answering calls or letters and I suspect we are going to have to wave goodbye to the fees. I was lulled into a false sense of security as he paid up so promptly for the earlier years, but now it is costing him he does not want to know. These guys are unscrupulous and I would not touch another case like that with a bargepole without getting the fees upfront first. Be careful.
Thanks for the update
It's always best to meet a potential client. You never know what might come of it. Even if all you got was increased knowledge from research it will be worth it.
Depends on how highly you value your time?
I've done a few mileage claims for £75 per year. After the spreadsheet is set up to make the calcs for the first claim, future ones are simply a case of filling in each legitimate site and the mileage, at a time cost of maybe 1 to 2 hours, depending on how many sites. So how highly do you value 2 hours work?
Also bear in mind, if the client gets a refund and is happy with your services then everyone he works with is a potential new client too.
If the cost to prepare the claim is more than the amount of refund then the client simply won't make the claim, or will try to find someone cheaper.