Member Since: 17th Feb 2005
18th May 2021
3rd Jul 2015
Early 90's a firm I worked for engaged a PR company to organise a rebrand.
To announce the firm's new name. 2 letters followed by a number. For obvious reason i wont say what it was, though defunct you never know if I offend someone.
They came up with the idea of sending the sort of brasses you put on a door or gate mounted on card. But individually over several weeks thought the post.
When clients were informed after this exciting announcement, the most often reply was what the billyo was that all about. Not a single one so far as I know twigged it had anything to do with us.
They probably thought they were being spammed by a new hardware store in the area.
25th Apr 2013
our reply, their reply
Well we wrote off a 5 page letter essentially refuting our perceived risk status as inferred by receiving the letter. This went off 21 March ish via email as per instructions.
No reply or confirmation of receipt, chased on 15 April.
24 April, phone call received. Thanking us for our reply, they have taken this into consideration and moved us to the lower end of their interest but they still want to have a snoop but probably not for 6-9 months and they will be in touch then.
But rest of the conversation was of more interest. This strikes me as a war of attrition, knock a £1 off each return to gain £1.5million across all CIS subcontractors. Target for project is £57million, that is £40 per return ish based on research I found.
Not really hard to find an error margin of £40 in any return from the top of the tree to the very bottom.
I was told HMRC have been complicit possibly for the convenience of everyone of being pragmatic in terms of ignoring the little things (use of home for eg) as expense/reward factor is neligble, ie why argue over a £200 expense item. Well no more! HMRC are now looking to apply the strict letter of law across the board even if the amounts involved are tiny. I guess a case of look after the pennies, but how much effort and expense will go into chasing those pennies.
I guess the £57million could be achieved in a lot less effort by chasing down even just 1 mutilnational taking the mickey, but instead review 1.5million tax returns for £40 each. Err common sense rules again.
Please note I have double posted this onto the main news thread for other who may not have been aware of this Any Answers thread.
12th Mar 2013
1 last thing
What's the worst case scenario, assuming that all the Tax Returns and refunds in question are correct?
Well, you sign and return the MOU. It's then business as usual - you send in Tax Returns and HMRC issue refunds. Then at some point (in a few months maybe?) HMRC pay you a visit. At the end of the visit they say "Well done, everything's fine, no issues here, our concerns have been removed. Carry on as you were".
Or did I miss something?
Sorry, I am intending on leaving this thread alone after my last clarification and just pointing out regarding the above.
Yes, I think you are missing something.
Presuming you are an accountant in practice for the benefit of making my point to you and others.
Has HMRC ever asked you to sign anything to confirm you will act in a prescirbed manner with relation to any of your clients or ever found it necessary, rightly or wrongly, to inform you that your firm (as a whole, rather than a particular client) is under scrutiny.
Or, as I, have you used your professional experience, judgement, training, qualifications and moral compass to guide yourself and your clients through the quagmire that is the modern world of accountancy and taxation with little overall trouble and never having had a problematic run in with HMRC, never having had a serious complaint by a client (the odd moan excepted), never having had a PII claim or even a potential claim, never had having cause to give either of my institutes a worry.
My problem boils down to the paragraph above. I already know I am a good accountant, there are plenty of controls in place already if I stray. I am not happy about signing a document which gives HMRC carte blanche to haul me over the coals for not following "their rules". I am sorry but I follow the rule of law not their view of what the law should be, any good accountant know HMRC's view of the law is often tainted by self interest. This is what the courts are for, getting clarity on how the law should be interpretated for the good of all not just one party.
This will likely remain my last words on the sibject, at least until we have prepared our reponse and see how HMRC reply.
12th Mar 2013
Fess up time, original post was coloured by the fact it mentions dishonest(y) 5 times in relation to agents. Not that sutble considering new regime starts in 3 weeks and this may be some early ammunition gathering. After all, having this closed off in 3 weeks after which we are all subject to the new rules seems unlikely.
I was reticent about posting it online regardless of redaction but as someone else has posted it, hey ho. I can confirm this is the letter we have received.
I would lilke to make my stance clear, I do not have a problem with HMRC protecting the public purse, I actually view our job as doing the same while giving taxpayers a fair voice.
I also believe we do not pose a risk to the public purse or that we prepare returns that are anything but as good as they can be in less than perfect circumstances.
I do have a problem with asking me to sign a promisory document saying I will be prepare returns based on arbitary bandings and other measures which have no basis in law and if I err from that path then I am de facto being dishonest, then subject to the rules about to come into force, and presumably ACCA/CIOT will want to become involved. I do and will continue to use my experienced and professional judgment to prepare returns which I believe to be correct, HMRC already have adequate enquiry powers if they think otherwise. I have a duty of care to my client to prepare correct returns, not ones which keep HMRC happy. Doing less than the best for my clients is personally and professionally not acceptable.
Our approach will be to provide proof of our systems and analysis of our returns to show as best we can that we are not a risk and refusing to sign a document which in my opinion holds me to being a servant of HMRC and not of my clients.
ps. does anyone think this is a PII warning issue?
12th Mar 2013
Black Panther wrote:
Revenue staff have no idea of the realities of commercial life and routinely make the most bizarre assumptions when dealing with enquiries. As an example the letter received by the OP which “assumes” that only 10% of a sub contractor’s income should represent overheads is a joke. Perhaps HMRC are not aware that hourly rates paid to sub contractors have plummeted recently (due to recession and cheap immigrant labour). Sub contractors are having to travel further to find work, and accept lower rates (often half what they used to be). Now oddly petrol prices have not halved, and additional mileage increases those costs, plus extra mileage equals extra maintenance and repairs too. The price of tools , any materials they buy etc has not reduced either, so quite logically a sub contractors overheads are now a much larger percentage of his income than they used to be.
I am not getting into the HMRC mud slinging, got more important things on my mind. But this paragrpah is a very fair point and mirrors what we see. I doubt many subbies are under 10%, simply because day rates and price work rates have fallen massive, 40-50% in some cases I have seen.And that is when work can be found, often subbies are only wokring 6-9 months of the year. Travelling 100 miles a day is not uncommon (a personal friend travelled from newcaslte to harrogate daily for 6 months, 160m per day), and long periods of working away (olympics being common in last few years, but i guess not after this year). These guys have families to support and a lot are struggling big time and frankly are working for peanuts.
Now the standard HMRC question, if a guy earns gross £20000, and has expenses of (35%) £7,000 (say 10,000 miles; 50m pd, my business partner commutes that; 60 nights away at £40 a few odds n ends) then receives a refund of about £2500. Then what does he live on. I tell you, he struggles, his wife has a job and they claim tax credits and anything else they can to survive. Same story again and again. When I first started getting subbies incomes were often £35-£45k gross and refunds were smaller more often tax was due. That is not the case since about 2009.
11th Mar 2013
Please give me the credit for not being new at this game, 20+ years actually.
The figures stated were rough, possibly very rough. I am having 1 of my team gather statistics to see how our returns fair against this arbirtary measure.
Also refund figures, round sums. Frankly I dont know how many clients nor how much refunds we gathered last year, they were guesses. But I would say £1500 on average may be close.
I run 2 businesses, our main accountancy practice and this CIS offshoot. It is held seperately for marketing and reputation issues, I am well aware there are a lot of dodgy inviduals who advertise in the back of redtops etc. That was the reason we entered the market, to give a decent honest service, a good portion of our clients have been stung by agents scarpering with cash or agents inflating refunds and client being left with tax to repay plus penalties and charges at a later date. This while my responsibilty ultimately isnt actually my baby, i barely touch the day to day.
I wouldnt be daft enought to use the 3 line accounts, it asks for trouble. Frankly never understood why it is in there.
We do have robust systems fof checking and confirming income and expenses, I designed them so I know they work.
We are currently considering our response, though it wont be claiming for defamation as I think a more measured approach is likely to get me further and faster than going ballistic at them.
11th Mar 2013
Thanks thus far
Well after mulling this overnight I am certainly not rolling over and signing a MOA which could be a stick to beat me with in the future.
I will happily setup a meeting and with adequate safeguards take them through our systems, let them establish they are as robust as possible and assure them they as we a long stading (over 10 years for our main firm), insured, regulated (acca & cta) that we should present a low risk of legging it or other dishonesty. Then have us removed from this debacle.
Also the large point in that we work to a fixed fee, we have nothing to gain financially from inflating or creating bogus returns. So simply put why would we.
Next stop a stern letter to HMRC putting our case as to why we wont sign but are willing to cooperate and also a discussion with CIOT/ACCA as to what assistance they can provide.
ps we are a ltd company, partners is a term i have always used.
pps refunds do not happen in all cases but the huge majority, simple mathematics means anyone earning under £35k with even a modest expense claim will be due something back. Earings under 21K and you are guarateed because of the PA. And in current times subbies earning under 21k is pretty common.
29th May 2012
For clarity. Big 4 prepared 2005/6 return under arrangement with employer. My client never saw or signed this return. (this info was new to me and now I am seeing potential for PI issue)
Return shouild have contained 2 P60's. 1 covers the employment, 1 is tax only and covers the equalisation scheme.
The second was omitted creating a liability where 1 doesnt exist.
4th Jan 2011
I agree that the "repayment pending" amendment made about a month ago helps. Though our clients cant see that, but at least we can see its progress.
Unfortunately this particular client has had the payment sent to and through security 3 times and then cancelled 3 times, we/and he have received 2 notifications that the amount has actually been paid when it hasnt. Client has as much as accused us of pocketing the cash.
Complaints have been made, ignore, promises made and reneged on. etc etc
And this is after they lost 3 separate 64-8's on the same client when he engaged us, 6 months ago. Meaning our work was severely delayed.
I get the impression someone doesnt like him.