I have a client for whom I do the payroll for their nanny (as well as their personal tax returns). One employee, £15 + VAT per month. I'm a one man band so I haven't got a trainee to whom I can palm off the handle-turning. I wouldn't do the payroll if it wasn't an additional service to their personal tax returns. Over the past few months and years I have had countless problems with HMRC, the latest being with them failing to refund SMP and then eventually doing so and refunding the wrong amount. This takes me a lot of time to resolve, but it's not my client's fault and they get no value from all my calls and letters and form filling to HMRC, so I am reluctant to send them a bill. What do you all do in these circumstances? Suck it up for the benefit of the client goodwill or send them a bill which might mean tripling their annual payroll running cost?
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You perhaps need to adopt a 'cover charge' approach to clients where there is a minimum annual fee of say £150 plus VAT, plus an amount per employee per week/month.
Often problems with HMRC are not related to individual employees but, as you say, general admin. You also need to cover yourself for answering the inevitable questions about Holiday Pay, Sick Pay, etc, and allow yourself enough fee income to provide the correct answers.
The 'no fault, no bill' basis is going to cost you dear when MTD kicks off!
Your client has received value in that they didn't have to spend time and sort the mess out themselves. As you have set a fixed fee, I guess you will have to bear the cost unless your agreement/engagement letter says differently.
If it was a one off then so be it, however, as you say this is becoming more frequent especially given MTD and a greater reliance by HMRC on online 'services'.
Clients need to be aware that sometimes the simple stuff can become time consuming, and whilst it is not the client's fault, it isn't your fault either!
You could try billing HMRC for your time, I've not done it lately, but I have had several cases in the past where they paid up.