HMRC to reimburse 60,000 Tax Credits Ltd clients
Following an investigation by HMRC, the tax authority will repay 60,000 clients of Tax Credits Ltd due to the company’s unsatisfactory processes.
Replies (14)
Please login or register to join the discussion.
'Head of LITRG, Victoria Todd, also commented on the HMRC’s track record, leaving the tax authority with a reminder of its duties. “We urge HMRC to keep this issue as a priority and review all repayment agents’ practices, not just in relation to assignments.'
So now this person wants HMRC to target EVERY tax repayment to an agent?
Would she prefer that repayment clients need to pay fees in real money before the tax claim is submitted?
It could be simple.
If there has been no complaint in respect of a tax agent that has acted for 10 years....Leave him alone. Risk is minimal
If the tax agent is regulated by a professional body.........Leave him alone. He is regulated
For all others?
HMRC make a risk assessment. Cannot be too difficult, HMRC know every client they have acted for and the size of refund.
Perfectly valid conclusion ... although LITRG are usually on the ball, so may have been slightly misrepresented this time?
What seems to be missing in the article is comment on HMRC's view regarding payment of a claim being directed straight to the agent.
I don't know whether you ever use that facility?
I can see why it's useful in certain circumstances, but also why it's beloved by the scammers.
Or indeed any comment on the other aspect that makes the scammers salivate ... the option to assign *any/all* repayments within a period of years to the agent (and without any further intervention/signature by the taxpayer).
Basically the process seems flawed (in the sense of multiple points of weakness) ... and, as you say, HMRC are failing to apply basic risk management.
HMRC check agents who regularly receive more than 20% of turnover for CIS clients. They do it by asking to check unnamed clients without opening an enquiry or having regard to GDPR.
The standard is an opening 2 page letter explaining the whys and wherefores. It's called an HMRC initiative and apparently it has stopped lots of agents claiming estimated expenses.
Much appreciated
The issue on estimated expenses is that estimates can be way over. Some claims I see on a takeover are......surprising.
That is specifically looking at fraud against HMRC, as in improbable tax result. But the usual short answer of capital allowances is already contained within the return.
A recent related matter was a cis subcontractor that is a sole trader who had both an employee and a subcontractor. He had 2 identical enquiries within 4 years which I presumed was simply because the refund was so big.
Sole trader meant no offset of PAYE and subcontract down against subcontract up.
In each case is was just prove the deductions suffered, and in one case it was because the HMRC Spreadsheet was wrong. The total at the top of spreadsheet did not go all the way to the bottom. Ten seconds of logic checking by HMRC and they would have seen their error. The spreadsheet came as paper so took a while to re-enter.
But that paper listing only arrived after the work was done. Not HMRC at their finest
Old fashioned firms like mine regularly get the refund paid into an our named client account, deduct our fee and repay the client
This is reducing, at least for us because the clients are usually labour only subcontractors.
That type of client is usually financially disorganised
Lots of firms do it. For us about 25 out of 300 tax returns
They would be challenged if we insisted on payment before filing
ICAEW has lots of rules on this.
It is absolutely normal
I agree that the attributed comments are a bit vague, but the idea that proper long term regulated tax agents operating within the rules need all of their 'practices' to be reviewed by HMRC is an outrageous soundbyte worthy of only the gutter press.
'Basically the process seems flawed (in the sense of multiple points of weakness) ... and, as you say, HMRC are failing to apply basic risk management.'
The issue of assigning future refunds is outrageous. That would never be done by a proper tax agent.
The refund is claimed on the tax return for the year of claim. Hence limited to one tax year.
If HMRC are accepting assignments then the fault is with HMRC being compliant with the scammers, not tax agents
Simple answer is for HMRC not to accept assignments.
But if they do that then who is going to be willing to do the work for all those tiny little claims?
60,000 at say £120, £7.2 M?
Maybe time for HMRC to spent £40K having a person look at bulk repayment agents, reporting to someone that cares, so that would be Jim and Gyles out of the picture.
Cannot be that difficult to find them if tax payers can find them. The search is going to be dead easy and just needs an iphone
How many bulk agents are there?
As a taxpayer I am happy for HMRC to bear the loss on money that they have given away to fraudsters. However, they surely have a duty to act fairly. I wrote an article in Taxation magazine a few weeks ago, criticising their decision to pursue taxpayers for money that HMRC had given away to another group of fraudsters. I do not think it fair for HMRC to decide that sometimes when they are scammed they will bear the loss but at other times they will pursue the taxpayer whose name was used by the fraudsters.