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Interesting fee base

Should we all copy this ?

Received an e-mail from a company offering to do my tax return. They claim to have done over 320000 returns since Sept 2013  and they operate on a no win no fee basis per below

I quote from the web site of Tax Returned Ltd - seems very cash rich and profitable. What am I doing wrong ?

"If you are one of the millions of taxpayers in the UK that IS entitled to a tax refund, then we will ensure that we obtain the maximum refund that you are due.

Our fee of 25% (plus VAT) per refund covers our time, expertise, and hours of potentially frustrating correspondence with the tax office on your behalf (subject to a minimum admin fee of £25 plus VAT). We like to be upfront about our fees as we have nothing to hide. No refund = No fee.

The best news of all is that you will receive 100% of the increase to your net pay going forward as a result of your new allowances – that’s all part of our service!

With nothing to lose, and only to gain….we feel compelled to use the old classic cliché – “It’s a no brainer”.

 

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18th Dec 2017 11:34

Abolutely! If we're not getting refunds for every client then we are clearly not doing our jobs properly and should not be paid.

Is what far too many people seem to think.

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to stepurhan
18th Dec 2017 13:43

Brings back happy memories of the olden days of estimated assessments. Back in the day one partner encouraged clients to pay the often inflated estimated liability. Accounts done producing a refund which covered our fee with some left over for the client. Everyone was happy!

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By mrme89
18th Dec 2017 11:50

They've hit a market that nobody on Accounting Web seems to want; PAYE workers entitled to tax relief. I.e the work deemed to be of low value.

For the fee, it's not worth doing the work for most accountants working in practice. But having an efficient, automated set-up means they can churn these jobs out charging a % of the rebate as their fee.

Even though the fee can be high as it's a %, a lot of their clients are targeted through social media. It means that their clients are happy paying the fee because 1) they never knew they were entitled to anything 2) they are happy receiving anything because it wasn't expected 3) they don't want to deal with HMRC.

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to mrme89
18th Dec 2017 15:10

The market is even bigger when you include all the workers who are not entitled to anything and submit repayment claims for fixed expenses whether they have been incurred or re immersed by the employer.

A firm near me advertises they can get you back £2500 regardless of who you are.

They were recently raided by HMRC and had all there files taken away and 5000 people are now faced with repaying HMRC the duff repayments.

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to mrme89
19th Dec 2017 11:55

CIS subbies?

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18th Dec 2017 15:15

Sounds like somebody's not learned from the Christopher Lunn affair. They'll soon be high profile with HMRC and subject to a load of enquiries. The only difference to Lunn is that they've probably sheltered behind the protection of incorporation.

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19th Dec 2017 08:53

It's actually quite lucrative. If you think about it, one claim with one employee in one company is likely to snowball through word of mouth.

I had this very thing last year with a relocation of a team. I priced on % refunded and it was a handsome fee for about a days work.

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19th Dec 2017 10:34

I'm currently working on the accounts of a client I have had for a number of years. Although there are circumstances in which he may get a refund, generally, if he's due a refund he's paid too much already - which is down to me. Specifically if his refund is down to, say, a change in vehicle why should I get 10%?

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19th Dec 2017 14:18

There is a reason why proper accountants are generally forbidden to operate this way, as it would generate all kinds of...er...commercial opportunities. How about never making elections to reduce payments on account, so that you could then collar part of the eventual refund? Or not initially claiming capital allowances, but then amending the return and saying how clever you were for generating a 'refund'? Or not using P45's or starter declarations in payroll, so everyone is on code BR, so there is a huge refund at the year end. Why aren't we allowed to do things like this? It's so unfair!

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20th Dec 2017 10:52

I do not know about nowadays, but years ago the ACCA published in its official diary, that to do tax work (see end-note) on a % basis was unethical. I am old enough to believe this.
If HMRC were doing their job properly I would think that there would be a rather iffy smell about any tax adviser working on this basis. At the top end we have recently seen what has happened to wealthy taxpayers with schemes peddled on this basis. At the level oj jobbing CIS persons it is often taking advantage of their ignorance.
There is a clear species distinction between tax refund claims and legal disputes being dealt with on a no win-no fee basis
End Note:
I refer to regular CIS _PAYE tax work or similar. I accept that for some specialist work, for example R & D claims such fees might be reasonable.

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