Oliver Bell & King LLP

Oliver Bell & King LLP

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Has anyone come across this company before?

A client of mine (rather stupidly) passed some details across over the phone to this company as they were suggesting he could reclaim some VAT using the falt rate scheme. Without signing any paperwork at all they have managed to register him for VAT (in the process backdating it 3 years) and registered him under the Flat Rate VAT scheme. I assume this has all been done online but it appears that they have done this illegally as my client has only just received the VAT application and flat rate scheme paperwork to sign to authorise them to do so.

The other issue is the backdating of the VAT registration too as my client will potentially have to pay over VAT which he may not be able to collect (for example due to a company being no longer trading). I've advised my client to not sign any paperwork and to contact HMRC as this has been done without the proper approval.

I find it rather surpising that this company are doing this, anyone else had any experience of this?

Replies (22)

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By ACDWebb
26th Jul 2012 08:56

This lot presumably

OBK Tax

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By zarathustra
26th Jul 2012 09:43

I'm all for innovative marketing, but...

...that website made me cringe!

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By uktaxpal
26th Jul 2012 11:57

sounds like a serious complaint or even Police matter

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By justsotax
26th Jul 2012 12:13

oh...hideous....

@uktaxpal.....I AGREE!

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By George Attazder
26th Jul 2012 12:22

Is it just me...

... that's got the hots for CIS Girl?

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By justsotax
26th Jul 2012 13:43

you obviously haven't

seen her from the back

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By katrinakilcoyne
03rd Aug 2012 00:26

Serious post on this matter of FRS backdated registration & OBK

I have a couple of construction industry type clients who have approached me about OBK and possible VAT rebates in relation to backdated VAT& FRS registration. Ignoring all the possible problems with raising VAT only invoices & payment from the contractors (agencies) the calculations do of course show a profit however this is not as good as portrayed on the website because the FRS profit is taxable income and subject to class 4 NI. My clients are keen to obtain a rebate (any extra money is helpful especially for construction workers who are really struggling in the current climate). Although I am extremely nervous of the VAT/FRS backdating why should I tell my clients not to do it? If their tax returns are corrected and they pay over the FRS VAT then they will have done nothing wrong, or am I missing something here? OBK say they pay the FRS VAT on behalf of the client and collect their fees out of the "client account" and so I assume they manage to collect the VAT from the contractors agency in advance. I can't get my head around the timings but I suppose a proforma invoice can be raised before the registration number has been received and so it is possible that the VAT only invoices can be raised and paid before the VAT is payable. I have considered the related problems with tax return corrections and possible interest/surcharges but these would not be substantial. I have also worked accountancy fees into the equation in relating to tax return repairs and although the bottom line profit is lower it still leaves a worthwhile profit for the client. OBK have also suggested the FRS category of "any other business" which I think is incorrect but this is not my main concern at this point, however I may be posting a separate query on this later!

I would value any comments from Accounting Web members especially if they have had dealings with OBK or perhaps handled a backdated FRS registration themselves. Be gentle with your replies as I know some of you get a bit tetchy!

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By katrinakilcoyne
03rd Aug 2012 10:37

JMB Wilmington v Revenue & Customs

Thanks uktaxpal but the case you refer to is in connection with backdating FRS when VAT returns have already been submitted.  My clients are not VAT registered at this point and so no VAT returns have been submitted.  I understand the rules allow backdating where the schemes are newly set up and going by OBK's website they must have had some success with this.

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By uktaxpal
03rd Aug 2012 10:45

The FRS % for labour only sub-contractors is 14.5%.I suspect HMRC will raise the %s 2.5% in line with incease in standard VAT rate.

I dont have problems with this as FRS scheme and VAT registartion is always discussed with sub-contractors.

Personally,I think HMRC will either change the regulations or take it to tribunal on the basis of gaining a financial advantage or some other device.

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By katrinakilcoyne
03rd Aug 2012 11:19

Yes I knew the correct rate for sub-contractors is 14.5% but I don't understand your point about "HMRC will raise the % in line with the increase in standard rate VAT".  Are you saying you think they are aware of the advantage and so you think they will change the %?  

I agree that FRS is worth considering for all subcontractors but for those on low income it can become less cost affective, especially if they have fluctuating work.  This is the case with most of my clients.  I will however now do a complete review of all my sub-contractor clients!

I note your point about the financial advantage.

Thanks again for your helpful comments.

 

 

 

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By uktaxpal
03rd Aug 2012 11:25

Yes to your question.

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By petersaxton
03rd Aug 2012 11:42

What is the advantage?

If a client is not VAT registered and then backdates their registration they will gain £2.60 for every £100 they previously invoiced provided they get the VAT from all their customers going back to the new VAT registration date. This is before accountants fees.

 

 

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By uktaxpal
03rd Aug 2012 11:59

Dont think that is correct.They will get 5.5% (20-14.5).

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By spidersong
03rd Aug 2012 12:30

It is correct

... assuming you're talking about Peter's calculation.

The flat rate is not a replacement VAT rate it's taken as a percentage of gross income so:

Invoice issued £100

VAT only Invoice issued £20

Income for supply = £120

Flat Rate payover = £120 x 14.5% = £17.40

'Normal' tax to account if not on flat rate = £20

Saving £2.60

They'd only save 5.5% if flat rate was taken as a percentage of net income.

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By taxhound
03rd Aug 2012 12:33

I worry about the future!

Most of my subbies can't keep expense receipts.  I dread to think how they will cope with quarterly VAT returns.

And I suppose they have considered purchase and sale of vans, new build work etc...

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By uktaxpal
03rd Aug 2012 13:05

@ps Sorry.

Is it worth it?In most cases-No!After considering all the pitfalls.

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By hkfinancials
03rd Aug 2012 14:00

Net savings of £1.85 per £100

The net amount saved after tax and NIC for a basic rate tax payer is £1.85 per £100.00 invoiced. This is of course before our fees in preparing the Vat Return. Therefore a subbie invoicing £30K per annum saves just aroung £555. After paying the additional accountancy fees will it still be worthwhile?

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By luke potts
13th Aug 2012 13:30

I think it depends on the fees you plan to charge.  The other thing to bear in mind is a client would have to pay tax on the saving in any case by way of corporation tax or income tax and class 4.

 

My main concern was the way the company registered my client for VAT without proper approval. By applying online this can be done relatively easily without the proper consent and just a few details. Not impressed with this company at all!

We have managed to sort it with HMRC who for once were quite helpful! 

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By Steve Couch
12th Oct 2013 13:33

OBK

How refreshing to see I am not alone with OBK. I too was contacted by OBK who claimed to be connected via the umbrella company I was under. They gave me a complete run down on how I should register for flat rate VAT as it would be in my best interest to do so and claimed by doing so they could get me £785.00 once I signed the paperwork. The paperwork arrived but I never signed it as I was cautious on the matter. This was interesting as they had not even seen any of my accounts. Before I knew what was happening I received confirmation from HMRC that I had been registered fro flat rate vat. I had not signed or given them any instruction to do so and was completely baffled how a company was able to do this legally, perhaps their not. HMRC were also baffled how a company could offer services and make claims without sight of any paperwork.The next issue arose with HMRC sending me a demand for £2501.00 which they deduced to be the amount owing together with a warning that I would be fined for non completion of tax return. The issue is still going on and I am now considering legal action on OBK for the issues caused. Don't bother registering for VAT unless you really need too.

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By norstar
14th Oct 2013 11:33

Belated, but yes

I also had this with them, but they also apparently authorised themselves as personal tax agent without clearance, thus removing us from HMRC's list, so HMRC refunded the client directly instead.

We've now lost the fee.

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By Charman
04th Feb 2014 12:02

Interesting reading

One of my friends is a small subbie on CIS and has been told that he can have not only the FRS Vat but also a further CIS rebate. Could someone enlighten me as to what that could be? He already gets the normal paid at source rebate. It's difficult all he can see are the pound signs these jokers are waving in his face and I'm telling him it's not as straightforward as that and the cons outweigh the pros. Not heard of any work being carried out without authorisation though...yet! On a lighter note CIS girl is a hottie!

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