New tax business has a number of queries.

New tax business has a number of queries.

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I am ACCA qualified and have been bookkeeping and management accounting for the past few years, but have been winding this down and will discontinue this in the next few months. I will be launching a tax refund businesss later this year and whilst I am happy with the technical side of this business I need a bit of help on some practical matters as follows:
 
  1. With regards to money laundering should a tax refund business be registered as an Accountancy Service Provider with HMRC? If so in terms of veryfying identity and address how should this be periodically be carried out, bearing in mind I will not be seeing clients in person as all the work will be carried out via post , phone and E-mail. 
  2. As mentioned above I am winding down my bookkeeping company. Should I set up a new company for the tax refund work or is it ok to just change the name?
  3. The tax refund work in most cases would span multiple years. Rather than fill in a R40 for each year, would HMRI accept a R38 tax claim form and a summary of tax due together with supporting computations?
  4. Where should the completed tax form be sent - just to the individuals local tax office or is there a particular department that deals with multi-year refund claims?
  5. In terms of keeping on top of any personal tax related changes, how do others stay updated? Is there a particular, hopefully inexpensive, provider you would reccommend?

I appreciate that there a re a number of questions here so even if you can help in only one area your input would be gratefully recieved?

Many Thanks,
Teresa

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By UK Tax
04th Apr 2011 09:19

Are you sure about this?

Teresa

Questions 3 and 4 make me think you've not done any of this sort of work before.  If you had, you'd know the answers. 

How will you charge and if percentage what about cases such as one we dealt with where possibly (and we're challenging this with HMRC) the client's records with HMRC show that they had received income they didn't tell you about, so that rather than a refund as you calculated,  there's a liability!  25 or 30% of X suddenly doesn't look so attractive.  You've no history or track record to go on with these one-off clients, and you've said that you won't meet with them, so be prepared for such surprises.

You're used to generally good records etc - get ready for a wake up call, or will you just accept what you get given and crank out the claim regardless?

What happens when the current crop of flavour of the month refunds have dried up (think about all those HIPS providers whose businsess model was holed when the law changed?) - I'd have thought that keeping the main, and importantly recurring, work would be a far better bet long term.  If you want to offer a tax refunds service as an addition to your main practice that would allow you to see it in action and enable you to better understand whether there is a really a long term business opportunity.

UK Tax

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ghm
By TaxTeddy
04th Apr 2011 11:37

Crikey!

Wow, this is a shocker. You are giving up a stable, and I would think, profitable business to have a crack at this idea of a 'tax refund' business - but with (it seems) little or no experience of what you are getting into.

At the very least I would suggest running the two businesses in parallel for a while to allow you to dip a toe in the water of the new venture. As 'UK Tax' says - you could be in for a wake up call.

But good luck anyway.

 

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