What constitutes R&D is subjective and the threshold has been low hence it has been so widely abused. Come claims have just been so outlandish and tantamount to fraud but nothing has been done to the promoters or HMRC have the bandwidth to inquire into each claim. R&D promotor have very vivid imaginations and sure they could even make up something for my accountancy practice and claim R&D !
I am surprised it has taken so long to even implement the notification window and justification for R&D which only came into effect last year.
There should be clear guidance what constitutes R&D and what isn't R&D. The problem at the minor very small tweaks to say a product range are eligible for R&D claim. R&D should be where a business does something so innovative on a large scale that is unique. Make it harder to claim and HMRC should vet each claim but of course poor HMRC are already struggling even with inquires.
Yes good point - I know so many people in the construction industry had a old sole trader bank account and limited company bank account and claimed for both.
No one is bothered and banks have been closing bank accounts where there is BBL so will get lost in the system. The only people that get caught seems to be at the liquidation stage so if they leave the company dormant I don't think anyone would find out about the BBL. Possibly someone could could claimed 50K BBL when the company was dormant and leave it dormant so when they die the debt gets written off.
There are just too many cases to go after and probably should concentrate on those will multiple loans and prosecute them but even these ones they end up with just a disqualification when it is blatant fraud.
Totally Agree. Only in the UK this can happen where BBL fraudsters can get
£50,000 with a click of a button and no one is at bothered. What's the difference lying on my mortgage application and lying on a bank loan. I would be jailed for lying on my mortgage application ?
We have end up paying for this in Corporation Tax increases due to these fraudster most of them just ended with disqualification which will have absolutely no affect on them and probably telling their mates they get 50k for free or in some cases much more than 50K as they had multiple companies or a sole trader bank account. I think most people would take 50K and disqualification if you offered it to them.
Yes totally agreed and then there will be some in the construction industry who have not declared their earnings suddenly will come forward either submit a tax return or amend their tax return to increase their profits
I think they should have said no one is allowed to amend their tax return and those who missed the 2018/19 cut off should only be allowed to be included if they can give a good enough reason for not submitting in the first place.
We will only find out a client has sold their property when we come to do their tax return months later and the client would have ended up with penalties. We know with NRCGT penalties are difficult to appeal against
I reported a couple SAR over the past year but I know nothing was done. Like the police the NCA overstretched and I assume only investigate the serious crime. For someone not VAT Registered when they should be I doubt will be high on their list. Its begs the question what is the point of reporting SAR and perhaps HMRC should have their own department for reporting minor tax evasion cases.
I am sure in every practice there are clients who dodge tax but they are clever hiding it from their accountants. Anyway, some accountants hardly know their client and just file their accounts based in information provided once a year without perhaps querying some blatant signals of tax evasion.
I was a little annoyed with some clients this year with the late information.
Next year, I going to send an email out saying if information not submitted by say 31st October, they will have to donate £100 to charity. I think most will not mind paying £100 to charity but would feel offended if it was paid to me. Anyway, I rather have the money go to charity.
Really pleased how well things out for you. I can tell why you are successful as you plan ahead and are focused. Of course you seem to provide a very good service to your clients too.
You have been very helpful and available to other accountants (including me). I always believe good things happen to good people who help others. You totally deserve your success.
I keep hearing about HMRC trying to cut costs and efficiency savings. This may just result in a even poorer service to both tax payers and their agents. We are all know about the long waiting times.
The work force is already demoralised yet the government is also trying to ensure they increase tax revenue. Unhappy employees is not exactly going to be motivated trying to fight tax evasion.
Answer is yes get rid of the bad eggs, pay well for good people and sure they will recover more tax for you which will more than cover the extra costs.
A lot of companies are so busy generating sales they often leave the back door open. I think there is fraud in most companies - companies do not take even contemplate chance of fraud until when it does happen all hell breaks lose and only then robust controls are installed
While they need to trust their employees they should also anticipate areas where employees could breach their fiduciary duty. If you leave the sweet shop unlocked it is inevitable someone will come along and empty it.
Some of this is just common sense and basics like two signatories on bank accounts often one person has full access. Though another common area where unscrupulous employees will exploit is setting themselves in partnership with their friend and then passing business to that company who charge at exorbitant rates. I am sure this discreet ploy goes on more often people would think
Small companies should really use an accountants knowledge in this area and ask for their opinion.
I have seen fraud and really does having a lasting impact ion many people. There is always an scapegoat too
On the positive, I know what exactly to look for to gauge areas of weakness with the internal controls and can advise my clients accordingly
My answers
What constitutes R&D is subjective and the threshold has been low hence it has been so widely abused. Come claims have just been so outlandish and tantamount to fraud but nothing has been done to the promoters or HMRC have the bandwidth to inquire into each claim. R&D promotor have very vivid imaginations and sure they could even make up something for my accountancy practice and claim R&D !
I am surprised it has taken so long to even implement the notification window and justification for R&D which only came into effect last year.
There should be clear guidance what constitutes R&D and what isn't R&D. The problem at the minor very small tweaks to say a product range are eligible for R&D claim. R&D should be where a business does something so innovative on a large scale that is unique. Make it harder to claim and HMRC should vet each claim but of course poor HMRC are already struggling even with inquires.
Yes good point - I know so many people in the construction industry had a old sole trader bank account and limited company bank account and claimed for both.
No one is bothered and banks have been closing bank accounts where there is BBL so will get lost in the system. The only people that get caught seems to be at the liquidation stage so if they leave the company dormant I don't think anyone would find out about the BBL. Possibly someone could could claimed 50K BBL when the company was dormant and leave it dormant so when they die the debt gets written off.
There are just too many cases to go after and probably should concentrate on those will multiple loans and prosecute them but even these ones they end up with just a disqualification when it is blatant fraud.
Totally Agree. Only in the UK this can happen where BBL fraudsters can get
£50,000 with a click of a button and no one is at bothered. What's the difference lying on my mortgage application and lying on a bank loan. I would be jailed for lying on my mortgage application ?
We have end up paying for this in Corporation Tax increases due to these fraudster most of them just ended with disqualification which will have absolutely no affect on them and probably telling their mates they get 50k for free or in some cases much more than 50K as they had multiple companies or a sole trader bank account. I think most people would take 50K and disqualification if you offered it to them.
Yes totally agreed and then there will be some in the construction industry who have not declared their earnings suddenly will come forward either submit a tax return or amend their tax return to increase their profits
I think they should have said no one is allowed to amend their tax return and those who missed the 2018/19 cut off should only be allowed to be included if they can give a good enough reason for not submitting in the first place.
Most will forget and end with huge penalties.
We will only find out a client has sold their property when we come to do their tax return months later and the client would have ended up with penalties. We know with NRCGT penalties are difficult to appeal against
Only one winner.
I reported a couple SAR over the past year but I know nothing was done. Like the police the NCA overstretched and I assume only investigate the serious crime. For someone not VAT Registered when they should be I doubt will be high on their list. Its begs the question what is the point of reporting SAR and perhaps HMRC should have their own department for reporting minor tax evasion cases.
I am sure in every practice there are clients who dodge tax but they are clever hiding it from their accountants. Anyway, some accountants hardly know their client and just file their accounts based in information provided once a year without perhaps querying some blatant signals of tax evasion.
I was a little annoyed with some clients this year with the late information.
Next year, I going to send an email out saying if information not submitted by say 31st October, they will have to donate £100 to charity. I think most will not mind paying £100 to charity but would feel offended if it was paid to me. Anyway, I rather have the money go to charity.
Really pleased how well things out for you. I can tell why you are successful as you plan ahead and are focused. Of course you seem to provide a very good service to your clients too.
You have been very helpful and available to other accountants (including me). I always believe good things happen to good people who help others. You totally deserve your success.
Good you remembered the Mrs too.
way to go
I keep hearing about HMRC trying to cut costs and efficiency savings. This may just result in a even poorer service to both tax payers and their agents. We are all know about the long waiting times.
The work force is already demoralised yet the government is also trying to ensure they increase tax revenue. Unhappy employees is not exactly going to be motivated trying to fight tax evasion.
Answer is yes get rid of the bad eggs, pay well for good people and sure they will recover more tax for you which will more than cover the extra costs.
Not surprised
A lot of companies are so busy generating sales they often leave the back door open. I think there is fraud in most companies - companies do not take even contemplate chance of fraud until when it does happen all hell breaks lose and only then robust controls are installed
While they need to trust their employees they should also anticipate areas where employees could breach their fiduciary duty. If you leave the sweet shop unlocked it is inevitable someone will come along and empty it.
Some of this is just common sense and basics like two signatories on bank accounts often one person has full access. Though another common area where unscrupulous employees will exploit is setting themselves in partnership with their friend and then passing business to that company who charge at exorbitant rates. I am sure this discreet ploy goes on more often people would think
Small companies should really use an accountants knowledge in this area and ask for their opinion.
I have seen fraud and really does having a lasting impact ion many people. There is always an scapegoat too
On the positive, I know what exactly to look for to gauge areas of weakness with the internal controls and can advise my clients accordingly