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Tax Credits

Tax Credits

 We have a number of issues that make us uncomfortable with regard to tax credits as a professional firm.

One area is we have a number of clients, who it is impossible to know there correct income as at 31st January each year.

One is a property client, who it takes a good year after the event to prepare accounts to get a true position of all expenses, a lot of this to do with the mortgages and dates and is no fault of ours or the clients. The other new self-employed clients.

We have noticed a number of clients recently have effectively under-declared there income for 2010 and whilst we write to HMRC TCO and inform them in the past they have said they can not accept these amendments as they are out of date.
Any thoughts and solutions around this would be welcome.






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15th Jun 2011 16:34

How on earth do you file tax returns?

Tax Credit renewals do not require any more information than the end result of a tax return. How on earth do you file tax returns? 


I don't know why 10 months after year end is not enough to figure out the information. What on earth takes more than a year to figure out mortgages and dates? Does HMRC not mind that your clients file their tax returns late?

I think the issue here is bigger than tax credits!

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By refs8
15th Jun 2011 16:49

Tax Credits

Thanks for your comment. But don't think you have got my point.

Actually don't agree the issue is that there are occassions when figures can't be finalised for whatever reason. We all know we can estimate tax returns and do so under self-assessment where appropriate.

The main example someone starts self-employment on the 1st March and first year end is normally 12 months afterwards e.g. 28th February or slightly longer accounting period to say 13 months 5th April. We have no choice to estimate for SA or TCO purposes.

It is impossible to give an accurate figure either on the tax return or for TCO purposes. Therefore you are encouraged to estimate low, knowing TCO figures can't be changed, as the deadline is 31st January.

All we want is a fair playing field and to be able to file accurate figures on each and every occassion fairly.





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By DMGbus
16th Jun 2011 09:00

Clients need to be got under control

when you say :

"we have a number of clients, who it is impossible to know there correct income as at 31st January each year."

It sounds like you're not in control here.  We all have difficult clients from time to time, but they have to be told sooner or later that they'll be charged higher fees (because extra work that THEY create) and / or start sufferring tax penalties and loss of tax credits (because of failing to meet deadlines).



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By refs8
16th Jun 2011 09:45


 I "give up" what started with trying to find a solution to a problem, seems to end blaming the client and or me for not being in control.

 I wonder sometimes having dealt with the revenue now for 20 + years why so many accountants think they are "wonderful" and the system works when it is clearly at near breaking point at times recently, especially tax credits.



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16th Jun 2011 12:12

Not a fan
I am no fan of HMRC, and I don't know why you think accountants love them (read some of the posts here) and stick up from them, but in this case, I beg to differ. The Revenue has many many problems, but giving a cut-off 10 months after the year end is not unreasonable of them.

Having dealt with many clients in many situations, I have yet to meet a case where 31st January deadlines couldn't be met for reasons other than our clients' fault (or ours). Even the argument about the snow at the end of January last year is only a technicality (does a taxpayer have the right to leave things to the last minute, and if something goes wrong, claim it was out of hid control?)

I am not blaming you, or sticking up for the Revenue, but maybe tightening up procedures would help you reach reasonable deadlines.

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By refs8
16th Jun 2011 12:30

Thanks for your sensible reply, given I am having a frustrating day with HMRC - where commonsense has gone out the window and I am be quizzed over even things that were taken for granted a couple of years ago by the Revenue.

If only they can see we are trying to work together, then maybe we have a chance.

Maybe I need to tackle the Revenue a little differently and stop being nice to them and complain more often formally and charge them for my time...!

I think a bad day summarises matters !




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