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Signatures on tax returns

Signatures on tax returns

When we started on-line filing, we all agreed that we wouldn't submit any returns until we had a signed copy to hand.

I seem to recall reading that it was only neccesary now to have permission from the client to submit them (e-mail would suffice), but not sure whether this is correct.

I've always sent out the full returns for signature but last week, due to the snow and being in a country area, e-mailed the returns to some clients asking them just to print off the signature page and send it back. I also sent them summaries of their income which of course are far more detailed than the returns themselves. So it occurred to me, why not only send the signature page in all cases ? The clients never look at 'em, only the summaries, it would save a lot in postage both ways, not to mention paper and laser toner, and should HMRC want to see the return (which I've never yet known), the other pages can be printed off to accompany the signed page.

Comments, anyone ?

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22nd Jan 2013 18:09

We had a client ...

... arrested for tax fraud earlier this year.  I cannot tell you how relieved we were to be able to produce on request tax returns containing his original signature.

With kind regards

Clint Westwood

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22nd Jan 2013 18:13

Comments ...

It is not a requirement to have a signature. A confirmation (suitably worded) that includes the filing reference for the return is sufficient.

I do send a return to clients but only ever a pdf file. Why would you print and send them by post anyway?

I still do ask for a signature but only ever an email of a copy of page TR6. Just a personal preference.

 

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By djtony
22nd Jan 2013 19:05

e-signing

For a number of year now we get our clients to sign a pdf version on-line using (currently) Docusign then let them have a pdf version for their records that includes the confirmation of the submission to HMRC.

They all love it as it avoids them having to return by post a large document that often needs a trip to the post office to post as they will not often have a suitable stamp in the house.

We tell them we that we can provide a paper copy if they want but that we will charge £15+vat - no one wants one!

 

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By refs8
22nd Jan 2013 21:13

Depends on the circumstances
Not always anymore to be honest. If we can we prefer a hard copy signature. Always send a copy after the event and ask client to confirm any changes within 3 days. Tends to be directors with dividends and P60 income with nil due.

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22nd Jan 2013 22:47

No need for any paper or even sight of a signed return or page.

Have a look at HMRC's requirements.

Until recently we attached one password protected PDF containing the return, tax comps, schedules and a cover letter with the return's unique ID number in the subject matter, all the client then does is respond to the email to OK the return.

Now, good old Iris has provided online approval via Openspace (similar to Docusign mentioned above), ie you upload the document(s) and the client is invited to download & approve it electronically, the time and unique electronic signiture is automatically added to the front of the PDF.

Openspace is available to anyone, ie you don't have to be an Iris user and the first 1GB of space is free.

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25th Jan 2013 16:06

Openspace

Hi Paul,

I was interested to read your post on Openspace today. Until now I have always preferred clients to sign accounts and tax returns with the old fashioned pen! Although I have used email confirmation by quoting the IR mark, etc. Anyway, I decided to start using Openspace for myself but wonder if you would mind telling me or suggest how you might deal with the following scenarios:

I would like to get my clients to digitally sign their accounts but after they have done this I need to sign the chartered accountant's report. I wonder whether I should try and do this digitally as well or print off the approved document and sign then scan? If I do this, firstly it appears to defeat the object of the exercise and secondly would I lose the integrity of the file because I've printed it, added a signature and scanned it? I'm talking here about individuals or partnerships (not Ltd companies); the accounts that would be attached to the client's self-assessment return.

The second problem I came up with was what happens when I need two or more signatures on one set of accounts. Whilst not absolutely necessary I do have some partnership accounts where all partners sign. I'm not sure how I would achieve this using Openspace but even if I did, might it not end up looking a bit messy with several approval pages attached?

Any information on the practical running of the system would be very much appreciated?

Thanks.

 

 

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27th Jan 2013 12:47

@donnagreen

Hi - being a bit of a Photoshop geek I've been using a tablet/pen for years and so have signatures for me, the firm & staff/associates that we have added to docs for years, including accountant's reports.  You can scan signatures to add but to make them look good it's usually a case of cropping, tidying & sharpening them up a bit in photo software.

These days with ipads etc there's far more opportunity to write to screen for the same purpose.  For any over anxious folk, these are not electronic signatures, but it's us producing the PDF and most clients don't have any idea how to edit and even if they did...who cares, paper/ink is just as insecure plus, life's too short,

So you can use this to get the accounts OKd on OpenSpace but, as it happens, we combine the accounts, tax returns, comps, cover letter etc into one PDF and so when the client approves the "pack" on OpenSpace they are agreeing the return and accounts.

At the moment OpenSpace only allows one person to approve at a time but I'm pretty sure they will improve the functionality soon so that you upload one set of accounts and each client contact registered will get the request to approve, this is how it works in other e-approval facilities. 

In the mean time there's nothing wrong with registering each person on OpenSpace and depositing one set of accounts on each and requesting each to OK. We are doing this with Ltd Company accounts.

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23rd Jan 2013 06:53

I ask for agreement

I send an email with a pdf and require the client to agree. This is acceptable to HMRC. HMRC would accept getting an agreement verbally but then you may have to prove it. You can't make clients read tax returns but you should give them the opportunity.

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23rd Jan 2013 07:48

I would just add ...

... that what is acceptable to HMRC and what is acceptable to your PI underwriters might not coincide.

With kind regards

Clint Westwood

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23rd Jan 2013 10:10

IR Mark

It is essential that you get the client to sign page TR6 showing the unique IR Mark or get him to confirm that he approves submission of his tax return specifying the IR mark.  As the IR Mark is a very long number, it is much easier to get the client to sign the Declaration on page TR6 and send that back to you - either in the post or scanned and e-mailed.  As we keep a PDF copy of the tax return showing the IR mark, we believe we are covered against any claim by the client that we have filed a return which he did not approve.

We send the client printed copies of his tax return (duplex printed), of the details making up the tax return and the tax computation in the post for him to keep or bin as he chooses.  We also send him a separate page TR6 with a covering one page questionnaire (Do you have any other interest or dividend income - UK or foreign?  Any casual income?  Any new state benefits?  Any new pension contributions? etc., and a final confirmation "I authorise you to submit my tax return showing tax payable of £x") and ask him to sign both the confirmation on the questionnaire and the Declaration on the attached page TR6 and return both pages to us - in the post or by e-mail.

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By djtony
23rd Jan 2013 21:27

Confidentiality

Am I alone in thinking emailing a tax return to someone is in breach of an accountants duty of care to protect privacy and comply with data protection requirements?

A tax return is full of private info that, if emailed, is just as safe as clipping to a postcard and dropping in a letterbox.

 

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By ACDWebb
23rd Jan 2013 22:21

Add a password to the PDF

djtony wrote:

Am I alone in thinking emailing a tax return to someone is in breach of an accountants duty of care to protect privacy and comply with data protection requirements?

A tax return is full of private info that, if emailed, is just as safe as clipping to a postcard and dropping in a letterbox.

 

and let the client know it, though obviously not in the email sending the PDF
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By djtony
24th Jan 2013 22:25

The password

ACDWebb wrote:

djtony wrote:

Am I alone in thinking emailing a tax return to someone is in breach of an accountants duty of care to protect privacy and comply with data protection requirements?

A tax return is full of private info that, if emailed, is just as safe as clipping to a postcard and dropping in a letterbox.

 

and let the client know it, though obviously not in the email sending the PDF

 

We send the password by Text message these days.  

Two advantages:

1 It travels straight to them so if by chance the email is sent to or opened by the wrong person they will not have the password (that's why banks do it)

2 It alerts them to the fact that they need to check their email.

 

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23rd Jan 2013 22:02

I send a PDF of the final accounts and tax return, and ask them to print, sign and send them back to me. I then scan that, and shred the paper copy to save space.  Long winded maybe, but it costs me nothing, and the clients don't have an issue with doing it.  

I have a legal disclosure on my email signature regards data protection.  My engagement letter gives the client the opportunity to opt out of sending sensitive information via email, too.

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24th Jan 2013 10:45

Thanks, everyone

Many thanks for the replies and comments, everyone. It's clear that I need to move into the 21st century !

It's interesting how opinions vary, but overall it seems that the safest method is to just post off the signature page with the long number and ensure that this is returned duly signed. And maybe just use e-mails where time is very short.

I use Iris and so a very comprehensive schedule of income and allowances is produced, so if I say that the return page is to be signed after reviewing the schedule, I'd think that this would suffice, at least from a common sense point of view.

This will not only save on printing and postage both ways, but clients often comment that they don't have large enough envelopes and have to take the returns to the PO to be weighed etc. And sometimes you get 'postage due' notes and then have to send someone to the main PO to collect them !

I'll have a look at Openspace, Paul, but it's surprising how many clients don't bother with e-mails, or only look at them rarely, even if they have got internet.

Ah well, back to the grindstone - only about 8 files left on the desk now, so should finish them this week with several days to spare !

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24th Jan 2013 11:27

Digita NetClient

http://digita.com/pro2011/software/net-client/default.aspx I use Digita and NetClient is their way to provide tax returns for client approval.

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24th Jan 2013 12:02

Depends on your clients

Eddystone - we've only had email communication with 98% of our clients for several years now, it depends on how important you see it as being, in other words if the clients know you will only send docs and correspondence on email then they will have to use email or not get the service.

It's only when you stop doing it that you realise how much time, admin & waste is involved in printing & posting back & forth.

As someone above says, an encrypted PDF in an email quoting the IR reference is perfectly adequate and we get no complaints from clients or the ACCA, who OK'd it 4 years ago at a monitoring visit. 

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24th Jan 2013 14:55

Thanks, Paul......

...........I'll review this whole thing after next week, and sound out a few clients as well.  Added to all the other things to do after next week !

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25th Jan 2013 12:10

Forward the attachments back to you

While reviewing the records of a client we obtained from one of the big firms, I noticed that the firm emailed the client a pdf of the tax return with instruction to 'forward' (not 'reply' as it usually excludes the attachments) the email back to them with the documents still attached stating that they had read and approved the attached documents for filing.

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By thacca
25th Jan 2013 12:57

Snap

That's what we do.

Edit. Ask the client to forward the attachments back to us is what we do.

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25th Jan 2013 12:24

One for Euan

Euan

You refer to the page 6 having the long IRMark on it, but as far as I am aware, the page 6 doesn't include this.  There is a declaration that includes it, is it this you are referring to?  We have never sent this, just get the client to email back the signed page 6 but I am wondering if we should change and start sending out the  'client copy and dcelaration' our software provides instead.  This starts with that delcaration, which inlcudes the IRMrk but the following pages are really just a list of the entries rather than the return the clients are used to seeing.  Do you think it is imperative that the signed page needs that IRMark?

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25th Jan 2013 13:03

Digita tax returns have the long IRMark on page 6

monksview wrote:

Euan

You refer to the page 6 having the long IRMark on it, but as far as I am aware, the page 6 doesn't include this.  There is a declaration that includes it, is it this you are referring to?  We have never sent this, just get the client to email back the signed page 6 but I am wondering if we should change and start sending out the  'client copy and dcelaration' our software provides instead.  This starts with that delcaration, which inlcudes the IRMrk but the following pages are really just a list of the entries rather than the return the clients are used to seeing.  Do you think it is imperative that the signed page needs that IRMark?

I use Digita and their software includes the long IRMark on page 6.
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25th Jan 2013 13:36

So does IRIS

monksview wrote:

Euan

You refer to the page 6 having the long IRMark on it, but as far as I am aware, the page 6 doesn't include this.  There is a declaration that includes it, is it this you are referring to?  We have never sent this, just get the client to email back the signed page 6 but I am wondering if we should change and start sending out the  'client copy and dcelaration' our software provides instead.  This starts with that delcaration, which inlcudes the IRMrk but the following pages are really just a list of the entries rather than the return the clients are used to seeing.  Do you think it is imperative that the signed page needs that IRMark?

IRIS also prints the IR Mark on the declaration page TR6 (and every other page) of the tax return.  As John has explained, the IR Mark is specific to the contents of the tax return - change any entry on the return and the IR Mark changes.  That is why it is crucial to get the client's consent to the tax return with the particular IR Mark that you submit to HMRC.

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26th Jan 2013 13:20

IR Mark

Euan MacLennan wrote:

IRIS also prints the IR Mark on the declaration page TR6 (and every other page) of the tax return.  As John has explained, the IR Mark is specific to the contents of the tax return - change any entry on the return and the IR Mark changes.  That is why it is crucial to get the client's consent to the tax return with the particular IR Mark that you submit to HMRC.

[/quote]

 

Good point, Euan, and something I admit I've not always considered.  Forgot to tick the tax repayment box ?  No probs, just regenerate the return and it'll go in correctly, but of course the client will have signed the original return and HMRC will have no way of knowing that's all that was altered.

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By chatman
26th Jan 2013 13:31

Changing a return after it is signed off.

Eddystone wrote:
Forgot to tick the tax repayment box ?  No probs, just regenerate the return and it'll go in correctly, but of course the client will have signed the original return and HMRC will have no way of knowing that's all that was altered.

HMRC won't know anything has been altered at all.  The issue would only arise if the client disputed having signed off the relevant figures, and then you could just show that the submitted return and the signed-off return differ only by the ticking of that box.

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26th Jan 2013 18:23

Yes, Chatman, but.............

........if you've only got the signature page then you've no way of proving what the rest of the original return said, have you ?  As far as I know Iris, which I use, only retains a copy of the last submitted return and wouldn't show the first one. Or maybe it would, I've never had to find out.

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By chatman
26th Jan 2013 18:51

@Eddystone

Eddystone wrote:
........if you've only got the signature page then you've no way of proving what the rest of the original return said, have you ?

Ah yes, I see what you mean. I always have the original email with the original return attached, but if you send the return by post then you might very well not have a copy. I suppose the answer is to send them all by email.

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27th Jan 2013 19:11

pdf

Eddystone wrote:

........if you've only got the signature page then you've no way of proving what the rest of the original return said, have you ?  As far as I know Iris, which I use, only retains a copy of the last submitted return and wouldn't show the first one. Or maybe it would, I've never had to find out.

I have a pdf of every version that I email. They all have the IRMark on every page. Even if you only have one signed page it will have the same IRMark on every page and you can compare the two sets of tax returns with the IRMarks.

 

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By DMGbus
25th Jan 2013 20:35

Which software omits the IR mark?

I would be interested to find out which software omits the IR Mark from the SA return pages, since a respected software writer has stated that it is an HMRC requirement that the IR Mark be present on each page of an SA return.

===================================================

monksview PM | Fri, 25/01/2013 - 12:24 | Permalink

 

You refer to the page 6 having the long IRMark on it, but as far as I am aware, the page 6 doesn't include this.  There is a declaration that includes it, is it this you are referring to?  We have never sent this, just get the client to email back the signed page 6 but I am wondering if we should change and start sending out the  'client copy and dcelaration' our software provides instead.  This starts with that delcaration, which inlcudes the IRMrk but the following pages are really just a list of the entries rather than the return the clients are used to seeing.  Do you think it is imperative that the signed page needs that IRMark?

==================================================

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25th Jan 2013 12:40

A timely query

... that cropped up last year too (and the year before I suspect). Euan, Paul and others have pretty much summed up the current situation, but for the avoidance of doubt, Charles Verrier who leads our document management discussion group commented in last year's Automating the tax workload article: “You don't need the signed pages - an email is fine. While there are ways of faking them, the practical reality is that emails are accepted by (Civil) courts every day of the week.

The IR Mark issued by HMRC is based on an algorithm calculated from the data contained in the version of the return that clients approve, he explained.  “As the mark changes when any of the return's content changes, you can use this to show that your filing was identical to the copy that the client saw and approved.” Using the the IR Mark number as the identifying reference is good practice, particularly if several versions have gone to and fro.

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25th Jan 2013 12:56

ICAEW webinar on e-signing and portal technology

Hi all,

Recently the ICAEW provided a webinar aimed to help practices understand the current and future legal framework for client confidentiality in relation to electronic communication and looked at the options available for securing digital information.

It included a live demonstration of an example of a secure end-to-end automated document delivery process enabling the legally admissible digital sign-off of documents, such as tax returns.

Please find the ICAEW link below. If you click on the view recording link, it downloads the video for you to watch at your leisure.

http://www.icaew.com/en/technical/information-technology/it-faculty/webinars/streamlining-and-securing-client-communication 

I work in the accountancy sector for Lindenhouse Software and 1000's of our accountants are using the Virtual Cabinet Portal to enable their clients to securely and legally electronically sign-off their tax returns. If you'd like any further information, I'd be more than happy to help.

 

 David 

07557113328

[email protected]

www.virtualcabinet.co.uk

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25th Jan 2013 13:41

One hand for the ship and one for your self.

 It will be the 999th client that will get you into trouble.

 Always get a signed copy of the return, Also make sure that the client signs his or her copy.

 If you are pushed for time, send the return by email and get the client to email back a clear stattement that the return has been approved- and still make sure that you also get back promptly a signed return- and the client has a copy.

 you should have a signed copy of any return you e-submit, VAT, PAYE,CIS et al. These are statutory legal documents, no signature? they aint worth nuffin.

Ask your PI insurer or ICAEW or ACCA.

 It is not unknown for a client, Gawd bless'em, to later claim

 "Not me guvnor, I never approved that"

 We all pray that insurance is a complete waste of time and money. Nevertheless insurance exists because Murphy's law is a proven scientfic fact.

 

 

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25th Jan 2013 13:54

and another thing

 

 Courts do not necessarily accept emails as proof. It depends on the circumstances.

 If you ever have, God forbid, to stand in court and explain an email, you will have to explain why you did not get a signed return. The PI insurer's, judge's /tribunal's unspoken opinion may well be "Lazy s*d". Courts /Tribunals can be quite racist about the accountant tribe.

 Also, there are two signatures, one to approve electronic filing, and two, on the return.

 Email is no more or less than an office tool, A convenient one to be sure, but when push comes to shove the real thing will save you much heart-ache.

 

 

 

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By chatman
25th Jan 2013 19:12

I get the client to approve by email.

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By DMGbus
25th Jan 2013 19:25

IR mark on all pages

Both Sage Personal Tax and FTAx produced SA returns have the unique IR mark on each and every page - including the signature page (TR6).

A scanned copy of a signed page TR6 is therefore to be regarded as acceptance of the whole tax return by the client / taxpayer.

The idea that eMails have no evidential value I find misleading and wrong.

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25th Jan 2013 20:19

irmark

It is part of the hard copy requirement that every page has an irmark and a cosecutive page number printed e.g. for an SA100 plus SA103 running to 12 pages,  page 1 of 12, page 2 of 12 etc.

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25th Jan 2013 22:36

requirements for irmark and page numbering

.... I have just read the current hardcopy spec, it is much less prescriptive than in the past and no longer mentions page numbering or irmarks ...

http://www.hmrc.gov.uk/softwaredevelopers/2013-copyspec.pdf

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By ACDWebb
26th Jan 2013 21:45

CCH Pertax

puts the IR Mark on every page - though potentially outside the printable area unless the printer settings are set to "Fit printable area" if you are emailing to the client and don't warn them - but also has what they call and "Internet Service Return Declaration" cover page for the client to sign that has the IR Mark slap bang in the middle of the page.

It also has a lock process for input screens and warns if there have been changes to the return since the IR Mark was produced with a compare function to highlight the changes.

So if the client sent the return back on 30 Jan approved but for one minor change you might, if you were so inclined,

make that small amendment,take a screenshot of the comparison to prove that was the only change,rerun the IR Mark,submit as amended ANDsend a copy of the amended return as submitted with new IR Mark to the client for reference.

But that might well depend on the circumstances of the error, the proximity to filing deadline and your view as to whether, knowing the client, it had the potential to blow up in your face in an acrimonious tit for tat in the future

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