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Do you manage your clients tax payments?

Client tax payments

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Historically we've managed clients tax payments when we filed the returns. It was never really a problem but the more clients we have, the more it's become an issue because each client has their own set of problems and one client doesn't want the payment to go through until the day and another clients doesnt have the moeny so don't submit that payment etc etc. With each moving part there is a potential for something to fall through the cracks and the blame game starts - " i told you not to pay that"

Does anyone have a policy for dealing with this. Do you introduce a blanket policy that it's all or nothing or you give them the info and let them do it themsleves?

Replies (32)

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By johngroganjga
26th Sep 2019 14:38

Just tell them in writing what needs paying by what date, and remind them that interest will be charged if late. Then get on with the next job.

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Replying to johngroganjga:
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By Crouchy
01st Oct 2019 09:18

we have the same approach

its the client's responsibility to pay their liabilities, not yours, as soon as you cross that line, you are creating a rod for your own back....so many things can go wrong that you'd be blamed for but which wouldn't really be your fault

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Replying to johngroganjga:
By Paul D Utherone
02nd Oct 2019 09:55

johngroganjga wrote:

Just tell them in writing what needs paying by what date, and remind them that interest will be charged if late. Then get on with the next job.


This. Going further leaves you open to the possibility of one falling through the cracks and a disgruntled client because you missed a payment on their behalf.
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Jane
By Jane Evans
26th Sep 2019 14:47

Most of my clients are elderly and are accustomed to a bit more help from me. I do not have any businesses in my client list, and I do not have a bank account for client monies.

I tell the clients the amount and provide a link to HMRC's payment page so they can find out the bank account details etc.

HMRC often doesn't send a BACS payment slip, and many of my clients pay by cheque. These clients send the cheque to me and I create an HMRC payslip and post the cheque.

For all clients I monitor whether HMRC has allocated the payment against their liability. As January progresses I chase the outstanding payments and remind clients to pay. This process picks up all sorts of problems, particularly in recent years when HMRC has made significant errors in the processing of returns.

I aim to get to the end of January with a complete checklist of all clients having paid in full. It is becoming harder to achieve this as the number of HMRC errors increases and my client list grows.

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By memyself-eye
26th Sep 2019 14:48

I tell them what they owe and when it is due.
That's it.

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Replying to memyself-eye:
By SteveHa
26th Sep 2019 14:59

That's pretty much me as well, with just a couple of exceptions from clients who have explicitly requested that I send them reminders when payments are due.

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By Louisemunro320
26th Sep 2019 15:07

We just tell them what to pay and when. Tell them a payslip for self assessment will be issued. For corporation tax we tell them what to pay, when and how. Its over to them - we are finding that most clients are refusing to pay, disappear or miraculously close their ltd companies straight away. Not our problem anymore - its sad because its not the service we used to offer. Changing times

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Replying to Louisemunro320:
By SteveHa
26th Sep 2019 16:14

Unless you are downloading and issuing payslips, you may want to amend that. The issue of payslips by HMRC is far from guaranteed, these days.

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Replying to SteveHa:
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By brumsub
01st Oct 2019 09:39

Agreed. We now tell clients they may or may not receive a payslip for payment from HMRC!

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By frankfx
26th Sep 2019 15:51

Solicitors wouldn't have this problem with reminders and molycodling.

"Pay this on date x."

"Follow ups , reminders and hand holding costs £24 to receive the request and £28 to reply.

We endeavour to respond to these requests within 5 working days.

Details of amounts due can be found on your Iris Openspace account.

As always we are pleased to assist you"

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RLI
By lionofludesch
26th Sep 2019 18:15

Got one old biddy who I post a cheque for (her cheque, obviously) but that's it. Special case as she'd struggle without help.

I tell 'em what to pay and leave 'em to it.

I don't want access to their accounts.

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By mbee1
27th Sep 2019 08:57

This is what is due.
This is when it's due.
Interest will be charged on tax paid late
Job done

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By bernard michael
27th Sep 2019 10:34

I go as far as John and no further

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By Bob Loblaw
27th Sep 2019 16:09

What's due, when it's due, how to pay it, a further reminder before the payment deadline. All as I gently hold their hand and sing them a soothing lullaby.

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By Carl London
30th Sep 2019 22:56

If your clients can post a cheque to you, why can't they post one to HMRC?

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Replying to Carl London:
RLI
By lionofludesch
01st Oct 2019 12:06

Carl London wrote:

If your clients can post a cheque to you, why can't they post one to HMRC?

I go and fetch it.

She's old. She can barely see.

There are exceptions to the general rules.

Thanks (2)
James Byrne
By jamesbyrne
01st Oct 2019 11:53

Have you considered Practice Management Software?
AccountancyManager has a Tax Payment Reminder feature which allows you to set reminders to the client as often as you would like, details on the reminders include, 'amount due', 'tax office' and 'payment reference'.

The idea behind this feature was to alleviate blame if tax payments are missed or incorrect amounts paid. As an accountant I know that although we tell our clients at the time the tax due, they still expect to be reminded nearer the time and if they are not and miss the payment they look to blame the accountant (even though it's not our fault!).

If you are interested in using a practice management system to automatically deal with some of the issues we face when communicating with clients, please take a look at AccountancyManager.

Thanks (0)
Replying to jamesbyrne:
wolfy
By rob winder
02nd Oct 2019 09:36

If they expect to be reminded that must be a cultural thing that you have nurtured to the point it has become the norm. We have never reminded clients and despite them missing the deadline on numerous occasions we have never been blamed.

If they need reminders they should mark it in their diaries. They are predominantly successful, to a degree, business people who should be used to being responsible for themselves and not expect someone to wipe their arses for them.

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By [email protected]
01st Oct 2019 11:58

It's better to set up another bank account for HMRC payments and set up the monthly standing orders for 9 months some rounded figures based on estimation HMRC liability and use (S/O Ref as UTR for all clients) after than that pay the balancing amount one you have finalized the liability.

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Replying to [email protected]:
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By Wanderer
01st Oct 2019 12:53

Atiqsuddle-AT-yahoo.com wrote:

It's better to set up another bank account for HMRC payments and set up the monthly standing orders for 9 months some rounded figures based on estimation HMRC liability and use (S/O Ref as UTR for all clients) after than that pay the balancing amount one you have finalized the liability.

Really?
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Replying to [email protected]:
RLI
By lionofludesch
01st Oct 2019 13:02

Atiqsuddle-AT-yahoo.com wrote:

It's better to set up another bank account for HMRC payments and set up the monthly standing orders for 9 months some rounded figures based on estimation HMRC liability and use (S/O Ref as UTR for all clients) after than that pay the balancing amount one you have finalized the liability.

OK - well, it takes all sorts.

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7om
By Tom 7000
01st Oct 2019 16:52

You collect and pay your clients tax liabilities? That's nuts... I am not sure its even allowed under institute rules and the risk of error is massive... why would you do this when you just tell them when hon much and how to pay and then soooo much less admin and risk

that's almost the daftest thing I have seen an accountant do.....

Stop.

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Morph
By kevinringer
02nd Oct 2019 13:54

I tell them what is due and when to pay it. HMRC has stopped sending blank pay slips so for the last 6 weeks before the deadline I also send them a SA361. I also give them the website address to make online payments and HMRC's phone number for card payments. I also advise them of the consequences of paying tax late. These are all in my standard tax return letter template. I leave it to clients to pay the tax themselves.

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By mail.taxperfect.co.uk
03rd Oct 2019 13:31

"HMRC should send you a payment slip before the due dates with which you should pay, but please note that if they do not then you can pay by alternative methods using the following link:-

http://www.hmrc.gov.uk/payinghmrc/selfassessment.htm

You’ll need your 10-digit Unique Taxpayer Reference (UTR) which is XXX.

Alternatively, you can send me a cheque (made payable to "H M Revenue & Customs Only") so that I can send it to them on your behalf.

Failure to pay by the respective due dates will result in late-payment interest (even if HMRC have not sent you a reminder). Furthermore, any part of your 2018/19 balancing payment which is not paid within 30 days of the date it is due will incur a further penalty of 5% of the amount unpaid (and further penalties payable as further time passes by)."

Then, as the first responder has stated, I get on with the next job...

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Replying to mail.taxperfect.co.uk:
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By bernard michael
03rd Oct 2019 14:46

mail.taxperfect.co.uk wrote:

"HMRC should send you a payment slip before the due dates with which you should pay, but please note that if they do not then you can pay by alternative methods using the following link:-

http://www.hmrc.gov.uk/payinghmrc/selfassessment.htm

You’ll need your 10-digit Unique Taxpayer Reference (UTR) which is XXX.

Alternatively, you can send me a cheque (made payable to "H M Revenue & Customs Only") so that I can send it to them on your behalf.

Failure to pay by the respective due dates will result in late-payment interest (even if HMRC have not sent you a reminder). Furthermore, any part of your 2018/19 balancing payment which is not paid within 30 days of the date it is due will incur a further penalty of 5% of the amount unpaid (and further penalties payable as further time passes by)."

Then, as the first responder has stated, I get on with the next job...


Why bother with the "alternatively" choice
Then you get involved with chasing or not chasing/lost in the post/can't make it now but I'll send it next week etc
Take the easy way. Tell them when it's due and the penalties for not complying and leave it that
Thanks (1)
Replying to bernard michael:
RLI
By lionofludesch
03rd Oct 2019 15:13

I'm wondering when they need to send it.

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Replying to bernard michael:
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By mail.taxperfect.co.uk
06th Oct 2019 13:26

Nobody has ever taken that option, and I've completed a zillion Tax Returns. and I never get involved in chasing. It's there as an option only. Mainly for the elderly clients who aren't internet-savvy. But, as I say, it's an option which has never been taken up.

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By CardiffAccountant
07th Oct 2019 19:49

This is a template that I have saved in the Outlook ‘signatures’.

Hi XXXXXX,

Your SA100 return has been submitted – see attached.

You will notice that the calculated tax payable is £Xxxxxx. However, as you have made payments on account towards this of £Yyyyy the liability is reduced to £Zzzzz.

You also have two payments on account to pay. These are:

£Aaaaaa by 31st January 2020 – making a total to be paid by 31st January of £Bbbbbbb.
£Aaaaaa by 31st July 2020

Click on the link below, and it will take you to the paying-in site:

https://www.tax.service.gov.uk/pay-online/self-assessment

Your Unique Tax Reference (UTR) is : 1234567890.

Once I have sent this, I simply get on with the next job.

Nearly all the clients are very grateful and only one or two come back a few months later with, ‘you know that email you sent me...’

Works well for me.

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Replying to CardiffAccountant:
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By Wanderer
07th Oct 2019 20:14

Do you consider it GDPR compliant to send all that in an e-mail?

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By CardiffAccountant
07th Oct 2019 20:38

Not sure if I’m missing something here.

It is my understanding that as long as the client agrees, and as long as the information sent does not disclose personal details ie DOB, medical details, bank details and such like, then this would be acceptable.

I appreciate the UTR may be a bit ‘iffy’, but I know that my clients will simply ask me to email them the number anyway.

If I am wrong about this, please let me know and I’ll review my procedures.

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Replying to CardiffAccountant:
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By Wanderer
08th Oct 2019 09:12

It was a genuine question from me.
Possible personal details are:-
UTR
Financial (tax) liabilities
Genuinely interested for clarification whether these are regarded as personal details under GDPR.

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Replying to Wanderer:
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By CardiffAccountant
09th Oct 2019 16:00

Hi Wanderer,

Please don’t think I was being flippant - I wasn’t.

I am not an expert in GDPR, and any suggestions will be gratefully received.

I have been involved in heavily regulated industries for over 30 years, and from what I have seen, practitioners get particularly precious about how they are going to ensure compliance.

It seems to me that whenever a change in or new legislation comes along, suddenly there are companies offering their advice (for a not inconsiderable fee), letting you/me know how to remain compliant.

Having been to a couple of events/work shops, I find the advice received to be sometimes contradictory; vague at best.

We have to get information to our clients. The methods available are:

Telephone conversation - can be easily misunderstood and does not offer any protection for me or the client.

Royal Mail - most, if not all of my clients do not wish for this form of communication. Also not unheard of letters going missing, clients losing them. Even possible that the wrong person could open the letter.

Face-to-Face - the problems with this are too numerous to list.

Email - goes directly to the client. Offers both parties protection. If worded correctly, no ambiguity

Being a small business (about 50’ish clients, sole traders and Ltds) I believe I have taken a pragmatic approach.

We have an agreement with all clients that electronic correspondence will not be encrypted.

As long as all communication is handled with consideration and care, then I see no reason why we should not use emails to advise our clients of their tax liability and how to pay HMRC.

Hope this makes things a little clearer.

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