Accountancy clients pay MORE than charged. Do I have to declare "gifts"/"tips".

Accountancy clients pay MORE than charged. Do I...

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A couple of times a year a client will pay me an extra £25 or £50 for my accountancy services. I do a good job for them, fix my prices for years and have a good rapport with them.

I do not solicit gifts or tips. I imagine I am given the extra money because of the personal friendship I have built up over the years.

Do I need to declare these extra payments or are they just capital gifts between friends.

By the way, these are not just mistakes made by clients when writing out their cheques to me.

Replies (26)

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By cparker87
28th Jan 2016 23:19

erm
You should know the answer to this and it certainly is not that they are capital gifts.

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By Matrix
28th Jan 2016 23:29

Value yourself and put your fees up to avoid this happening.

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By penelope pitstop
28th Jan 2016 23:40

But aren't personal gifts to ministers of religion tax free

But then I would definitely be taxed on the £350, no questions about it.

The problem is that unlike a waiter or waitress in a restaurant trade, I have no expectation whatsoever of receiving any extra. It is just not part of the nature and expectancy of my profession "trade".

As far as I am aware, it is not a tradition to pay more for accountancy fees than charged. Rather, it is the other way.

In fact, if I had any input, I would discourage my clients from paying any "extras", because I am quite happy to be paid exactly what is billed.

 

 

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Replying to lionofludesch:
RLI
By lionofludesch
29th Jan 2016 07:30

Good luck

penelope pitstop wrote:

But then I would definitely be taxed on the £350, no questions about it.

The problem is that unlike a waiter or waitress in a restaurant trade, I have no expectation whatsoever of receiving any extra. It is just not part of the nature and expectancy of my profession "trade".

As far as I am aware, it is not a tradition to pay more for accountancy fees than charged. Rather, it is the other way.

In fact, if I had any input, I would discourage my clients from paying any "extras", because I am quite happy to be paid exactly what is billed.

Good luck at FTT with that line of argument.

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Replying to lionofludesch:
Stepurhan
By stepurhan
29th Jan 2016 08:34

You do have input

penelope pitstop wrote:
In fact, if I had any input, I would discourage my clients from paying any "extras", because I am quite happy to be paid exactly what is billed.
What is stopping you returning the excess, or returning the cheques that are for too much and asking for them to be amended, or correcting them if they write them out in front of you? No-one can force you to take more money.

As others have said, you can't just make up a story as to what these extra amounts are. You are receiving the cheques for providing accountancy services and you would need to conclusively prove they were something else to not treat them as such.

As an aside, are you VAT registered? You might have a problem there as well if you are.

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By Penfold
28th Jan 2016 23:59

The payment

was by reason of what exactly?

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By cheekychappy
29th Jan 2016 07:39

So if someone visits the same coffee shop every day and tips the same waitress, you think that would not be taxable because there's a friendship there?
Maybe we can all hold hands, love each other and we will never have to pay tax again.

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Tony s
By Tony S
29th Jan 2016 08:49

ask for it in cash

ask them to pay you in cash, problem solved...

 

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RLI
By lionofludesch
29th Jan 2016 09:24

Credit balance

<chuckle>

Or, record it as a prepayment in your sales ledger.

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paddle steamer
By DJKL
29th Jan 2016 10:03

Gifts/ perks have forsaken me

Gifts/ perks have mainly forsaken me in my professional life, over thirty years at this and the sum total is:

Very nice fruit bowl given to us  by a client of the firm I then was employed by, as a wedding present back in 1990- we still have it in the sideboard. 

Other than that we have gifts re Christmas and entertainment

Re practice-Some coffees a few meals from clients, though most of the meals were years ago -these days it tends to be a coffee and a biscuit.

My employment is slightly rosier- I tend to get a bottle of whisky  each year at Christmas from one of our suppliers and have managed to go to the rugby a couple of times with one of our bankers and Sunderland FC once with another firm of accountants we use.

 

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Img
By MissAccounting
29th Jan 2016 10:06

Bribe
Its a bribe, clearly!

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Man of Kent
By Kent accountant
29th Jan 2016 10:21

FFS!!

You are joking aren't you...

...and you really are an accountant?

I pity your clients...

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By Anne Robinson
29th Jan 2016 13:25

Surely a gift would be more like a box of sweets
Outside of the sort of service which you normally tip (hairdresser or waitress) people do not give money as gifts - if they wish to show any extra appreciation they usually give sweets or a bottle.

Next it will be half the bill is for services and half for a gift.

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By chatman
01st Feb 2016 10:50

Unnecessary Rudeness

I think some people responding to this thread have been unnecessarily rude.

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By cheekychappy
01st Feb 2016 11:11

Unnecessary Stupidity

I think the person posting this thread has been unnecessarily stupid.

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Replying to tbk:
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By bilajio
01st Feb 2016 11:10

ha

cheekychappy wrote:

I think the person posting this thread have been unnecessarily stupid.

 

brilliant

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By chatman
01st Feb 2016 11:05

But does that make it OK to be rude?

@cheekychappy - But does that make it OK to be rude?

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Replying to thevaliant:
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By ghewitt
03rd Feb 2016 08:57

Quite.

chatman wrote:

@cheekychappy - But does that make it OK to be rude?

Quite so, we ought not to be rude to anyone; being rude is making a judgement that someone 'deserves' such rudeness.

If we take a good look in the mirror we shall find we are not qualified to make any judgement on anything about anyone.

Unfortunately, that seldom happens as we are far too busy being judgemental and putting people down - which means placing ourselves above them.

That can happen so often that in the end we become so high it can be smelt.

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By cheekychappy
01st Feb 2016 11:08

Yes, I think it is. You will see from my earlier post that I showed tremendous restraint in not being rude. Other contributors were weaker than I, but I don't think it was unnecessary.

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Quack
By Constantly Confused
01st Feb 2016 11:11

So what have we learned

So in short, tell them they have overpaid you and you are returning their money, while enclosing an Argos catalogue with a few things circled in it.

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By Pelican
01st Feb 2016 12:25

Just put in your back pocket. 

 

No one will ever find out 

 

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By penelope pitstop
01st Feb 2016 17:19

What about the £10,000 legacies from clients I have been left

So then, what do I do with the two £10,000 legacies I have been left by my accounting clients.

Do I add these to my takings or do I treat them as capital gifts from clients.

Again, they were not solicited. In fact, for one client I told them point blank NOT to leave me as a beneficiary of their will. (The client told me they were leaving me £10,000 in their will).

 

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By cheekychappy
01st Feb 2016 17:22

Tax just isn't your thing, is it?

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By ghewitt
01st Feb 2016 17:30

What do you do about the legacies??

If you are unable to think what to do with it I am very willing to come and take it off your hands, which will solve the problem in one stroke... no, no, don't thank me; all part of the service and if you want to add some extra - or an Argos catalouge (Fortnum and Mason preferrred) I won't be difficult about it.

 

Promise :D

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By Anne Robinson
01st Feb 2016 20:03

This is a joke isn't it?
Just surprised that anyone had the energy in January to do anything other than Tax Returns

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Replying to Mr_awol:
By cheekychappy
01st Feb 2016 20:17

Love

Anne Robinson wrote:
Just surprised that anyone had the energy in January to do anything other than Tax Returns

 

None of the OP's clients had anything to report. All their income was eligible for the love and friendship exemption.

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