I want to be able to offer tax rebate / relief services to inviduals that have either overpaid through PAYE or haven't made a claim for uniform tax relief...
I'm slightly stumped as to what agent route should I sign up through on the HMRC site:
Thats right, R38 repayment claim form as these cannot be completed online. For that reason, 64-8s should be filed for each client, rather than an SA password request.
Confused? Me too! Not sure why, off hand, but both of the two major software suppliers I have been using for umpteen years refer to a Repayment Claim as R40. You've correctly pointed out that HMRC Repayment Claim form number is R38.
The R40 resembles an old-fashioned tax return - I won't say short, because that will just add more confusion, but it's not as long as a core self assessment form. HMRC describe it as a repayment form for tax deducted from savings and investments, but I know it to be more than that and disagree with their definition, hence the confusion.
Here is a link to many of the forms you might need in providing the rebate service :-
A 64-8 is an agent authorisation form. I mentioned it because repayment claims cannot be carried out online which is what had you stumped. Go ahead and sign up to as many online agent services as you might require in future, and when you have a client who requires Self Assessment etc, then submit a password authorisation request.
However, as referred to in my second posting, a paper 64-8 will be required for the primary services you intend to offer.
Please post again if I've only succeeded in creating further confusion.
I want to be able to offer tax rebate / relief services to inviduals that have either overpaid through PAYE or haven't made a claim for uniform tax relief...
I'm slightly stumped as to what agent route should I sign up through on the HMRC site:
PAYE or Self Assessmet?
Thanks in advance.
Hi Buo6,
I've had a look and it is no wonder I've rarely, if ever used an R38 form. It transpires this form is for when a refund, and the amount, is already known, not for ascertaining one.
So it has a limited function as far as offering services goes. Type in 64-8 in the HMRC search bar to download that form for representing individuals in obtaining tax refunds.
Tell us a little about yourself and how across the forum. The oven is beeping, so talk later.
I was under the impression that you can use the R38 form to claim a tax rebate, even when you don't know the value?
As you have probably guessed, I'm not accountant. I actually run a number of 'money saving' sites - one revenue stream we're looking to explore is a tax rebate service. Similar too:
https://www.uniformtaxrebateco.uk/
It looks like this site using an R38 form to submit the claim?
You are looking at setting up as an agent for the employed who do not aleady have an agent looking after them.
But, you are not a financial professional.
So, if you make a mistake in making a claim and your client is fined a penalty will you pay their fine? pemalty? interest? surcharges?
No PII company is going to touch you as you are not a trained professional.
The business that you refer to in your last post works out of virtual offices with no link to the real business.
Do you really want to be going into the sort of business area populated by untrackable businesses that are set up with the ability to disappear without trace?
I appreciate that this is a negative post and you are only looking at a business opportunity but if you are serious you should seriously consider factoring into your business model the cost of employing a qualified experienced accountant rather than thinking that this is a service that you will be able to offer on the cheap without repurcussion.
The post is intended to be constructive rather than aggressive but appreciate fully tha there is more than one way to read it. Please note that if you took offence at the above then that was not my intent.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Appreciate the reply, constructive criticism is welcome...
There seems to be plenty of 'tax rebate' companies operating online.. is it a fairly shady industry?
I wasn't aware that the client could face penalties, would you mind going into more detail? I was under the impression that if they match the criteria for tax relief, then they are eligible?
In HMRCs view it is reasonable to expect a person who encounters a transaction or other event with which they are not familiar to take care to find out about the correct tax treatment or to seek appropriate advice.
Appropriate advice implies the use of an experienced professional.
You need to read the entirety of those two links but you should see at the end what I mean about needing the retain the services of an experienced accountant if you push forwards with this idea.
By retaining the services of a professional you are basically transferring a risk for which insurance companies would not cover you via PII.
I am not saying that you would need to use the accountant for everything as the work would become quite mechanical but you would need to have them on board to get you started and to monitor the work that you do in order to ensure nothing will come back later to bite you later.
That is really going to add dramatically to the cost of this enterprise and I suspect that it's a step that your competitors are not taking.
What they are doing is not illegal but it is unethical as they are, I pressume not qualified to give the advice that they are.
On the subject of risk transfer, see the the "man down the pub" tax advice changes that are in the pipeline.
The legislation has not yet been enacted, Comments were only published in December from the consultation but if it is introduced then a loss by the treasury due to incorrect advice could see the person concerned fined between £1,500 and £50,000... That's worrying enough for those of us who think that we know what we are doing. If I were untrained I would be quaking in my boots.... Or simply not giving any tax advice at all.
I'm sure that companies such as the one that you indicated earlier which are geared to disappear at the drop of a hat do not worry about this but you give the impression that you are not of the same ilk and are trying to do things properly.
Have fun with the above links.
look forwards to chatting soon,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I had a close friend who filled a clothing allowance claim upon being sent a similar form by his union. Many of his colleagues had completed one and he was able to claim 5 years worth of clothing allowance. This added 300 to his current years code number worth £12 p/a in reduced tax. Alls well that ends well.
A taxpayer had received a large severance settlement 4 years ago. As is common practice, the employer had only operated 22% tax, albeit with a warning that further tax might be due. If my above friend had received such income, then upon the Revenue reviewing his R38 clothing claim, instead of him receiving a few pounds, less agent fees, he could be faced with thousands of pounds in back taxes.
There have been millions of unreconciled PAYE cases in the past few years. I do not exaggerate the number. The Revenue made a deliberate decision around 2006 not to devote resources to reconciling, as had been the norm since 1944.
Pretty scandalous, but my question is, would your operation have forseen this disaster for my friend? Only if it had prepared thorough tax assessments (say R40) for all previous years, and that, as Shaun has said, is the territory of a qualified tax professional.
Having said that, the Revenue might never get round to reviewing the earlier years. Even if they did, my friend would have a right of appeal. That, though, is often a long and costly process.
Another fairly negative post, but it's born of knowing tearful or angry taxpayers are at the other end. As you can see, £12 is not a very lucrative income stream, so I don't know what percentage those firms take.
Interesting that HMRC will dish out the 'Agent' title without requiring any formal qualifications.
Having gone through the links you posted, it would also appear that liability ultimately lies with the client, regardless of whether they go through an agent or not?
Do you know roughly how much it would cost to hire an accountant to set up the processes?
I think that the word should be worrying rather than interesting...
On the lianility front, not quite true on the use of the word ultimately. Yes, the responsibility lies with the client but you are responsible for :
- What you knew
- What you ought to have known
- What you ought to have done about it.
And whilst HMRC will go after the client, the client will then go after the adviser / service provider.
Just an additional note there on negligence.
- An enforcable duty of care must exist (you have formed a contract with the lient)
- That duty must have been breached (advice given resulted in loss)
- Loss must have resulted (the client has paid penalties to HMRC)
My understanding of the law if that you will never be expected to refund them any more than their loss to put them back into the position that they would have been in had the advice not been provided.
HMRC fining one for giving bad advice is a seperate issue and the law I spoke about before is not yet in statute.
A good quality accountant should cost between £30 and £40 per hour. Many accountants charge much more than this but cost alone is no reflection of the quality of service that you will receieve. They may offer a fixed price service.
You state that you have several other sites so I assume that you already have an accountant looking after your businesses? If so, they would be a very good starting point or you could try advertising on here for someone to fill the role.
This is not an area that I personally am looking o become involved in but maybe Tim might consider the role?
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
It's definitely something I will need to research further. Just a few more questions from me:
1) What types of error could occur on an R38 form that would attract a penalty from HMRC? 2) Would I be held liable, if a situation similar to what Tim described happened. i.e Client ends up with a backdated tax bill.
I do have accountants in place, but would look to a freelancer for this job....
bu06nne wrote:Interesting that HMRC will dish out the 'Agent' title without requiring any formal qualifications.
Hi Nick, yes anyone can be an agent - say someone who wanted to be able to correspond on behalf of their blind parent. Once registered, HMRC have a means of measuring the agent. Case in point - an agent who always obtained refunds.
Hi Shaun, thanks for your earlier posting as I hadn't cottoned on the nature of those tax refund companies. What an operation like this needs is a web-designer. I wouldn't feel comfortable; although the law ought to remedy those who have a genuine expense to fulfill their duties, this just seems like a 'get-something-out-of-the-system-to-pay-for-our-pimms' operation.
I'll keep to the voluntary bit, where I'm comfortable sticking the boot in :o)
