'My colleague fills in his own Self Assessment" and he/she claims,x,y and z"

'My colleague fills in his own Self Assessment"...

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This has happened to me twice in the last week, I have been very nice about it and have stood my ground. Clients like to tell me that I'm wrong because their mate in the same position as them doesn't have to pay a penny of tax because they fill in their own tax returns and claim for x,y, and z. Classics this week have been Seafarers Earnings deductions for an oil and gas company but client was based onshore throughout contract but not enough away days to be non-resident in the UK and another one that is UK resident and works in Norway, earning over the max threshold for PA so Norwegian tax deduction insufficient to cover UK tax due, the last one shouted down the phone at me that 20 plus of his colleagues earning more than him weren't paying any extra tax this year so why was he?! He pays tax in Norway January to December and he tells me, he doesn't have to comply with the UK tax year - his mate doesn't (His mate does his return himself) Then there is the one that is on a tour of duty in the states with his family - 80% of accommodation costs paid for by MOD with a small contribution paid by them - they cannot understand why the small amount (20%) of the accommodation costs that they have to pay over there is not available to offset against their UK property rental income even though the 80% is already being bourne by MOD/employer tax free. All their mates out there doing the same thing are claiming it (self-assessing!) On the flip side a new client came to us last week having tried to submit his own Return and being shocked at the tax bill - We corrected it and for the sake of a £360 fee he now has approx £6000 less to pay tomorrow! Disengagement letters being polished for next week maybe?

Replies (7)

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By ShirleyM
31st Jan 2015 07:39

Yes, it's very demoralising

Many who submit their own tax returns make serious mistakes, but on the whole, they get away with it. I think this has always been the case.

I remember my first year in practice where I picked up a partnership who owned a motor repair garage. They did their own SA800. In their first year they had claimed everything through the P&L (including fixed assets) and also claimed 100% capital allowances (there was no AIA then!) leaving a massive loss. I had a nice time sorting it all out, but there wasn't an enquiry.

HMRC mostly seem to raise enquiries where the taxpayers have omitted some income that HMRC are aware of, eg. omitted employment income or self-employed income, or the taxpayers have put all the lot together with complete abandon. The rest just pay more, or less, tax than they should, but the fact that it is accepted by HMRC confirms their view that they are right, and we are wrong.

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By adam.arca
31st Jan 2015 08:13

Platitudes
I just roll out the platitudes: "you do realise an expense needs to be W+E(+N)" or "you do know the UK tax code is the longest and most complicated in the world" or "I'm not an X, Y, Z like your mate, but is he an accountant" or "I spent 10 years becoming an accountant [rounds up] and your mate knows it all after googling for an hour."

That seems to work on the whole but it would be so much easier if the Rev pulled their weight.

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RLI
By lionofludesch
31st Jan 2015 08:50

Not much of a threat

I used to roll out the threats of "what if the Revenue catch you ?" but the fact is, they won't.

Even when they pull one for enquiry, it seems to be the squeakiest clean job they could choose.

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Replying to SXGuy:
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By Ken Howard
31st Jan 2015 12:25

And miss the bleeping obvious!

lionofludesch wrote:
Even when they pull one for enquiry, it seems to be the squeakiest clean job they could choose.

And when they do open an enquiry, why do they miss the bleeping obvious.  I once inherited a limited company full enquiry with a horrendously overdrawn capital account, but the inspector clearly didn't understand debits and credits as she never noticed it!  Then another which was a classic IR35 case, but the inspector kept going on and on about subsistence costs - completely missing the obvious pointers, i.e. working at the same place for years, same travel pattern, virtually no other expenses on the P&L (no insurance, no training, no equipment, etc).  

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By bernard michael
31st Jan 2015 11:17

I thought I had problem clients until I read the OP. I've already told one of mine that I need his records before June if he wants to do his return instesd of peicemeal through Dec @ Jan as I raised questions

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By TaxAngel
31st Jan 2015 16:25

I just mention fraud and being able to sleep at night

I agree it's so frustrating when clients' friends/colleagues are clearly doing it wrong and getting away with it. I just stick to my guns and mention fraud and I've only lost one client in 20 years as a result.  I realise not all accountants will have the luxury of being able to take that approach but I tend to find my clients respect me for insisting that I am not involved in submitting returns that in my view are not correct. After all that;s what they have signed up for (engagement letter mentions ethics).

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By mattgriffiths
31st Jan 2015 19:53

Simply State

that you can claim what you want, but that doesn't necessarily mean it's an allowable deduction.

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