Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Carl2009 on September 22, 2014, 03:23:37 pm
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Hi guys
My accountant does my tax return and P and L account each year. I've just received a letter from them (it's a multi-partner agency, not a single accountant working by themselves) saying that HMRC are conducting more and more investigations and such investigations take time and can cost a lot of money (in terms of accountancy fees).
They are suggesting an insurance policy to protect against such costs, for £85 per year. The insurance provider is Taxwise Services Ltd (http://www.taxwise-online.com/). Cheque to be made payable to them, not the accountants. Clearly the accountants will get a commission.
I'm trying to get a handle on how many people (you guys :-) ) have been investigated, how long did it take and what were the costs? Has anyone else had Taxwise or similar insurance and had cause to use it? Has anyone else been approached by their accountants suggesting such insurance?
I don't really want to pay another insurance, but can see that there are more and more investigations and whilst I am clean and all is in order it could well cost me more than £85 if I was picked as someone to be investigated.
Cheers
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As a trade that has a lot of cash transactions we ARE liable to be investigated by HMRC. We have insurance via our accountants but I'm not sure of the cost, it's included in the monthly bill.
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As a trade where more and more of businesses are using accounting software such as Aworka and Cleaner Planner so long as you are honest you havent got a great deal to concern yourself with, if youre insured you turn your books over and let them get on with it essentially.
We're isnured via the F.S.B. we use an accountant and we use round software, Im not sure there are any other things to do to try to make life any easier if youre picked. As honest as the day i was born regarding tax, I sleep easy these days.
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Yep, I'm all above board too, but I'm just wondering if £85 is a good investment. It may well cost me more than that in fees if I am investigated.
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Hi,
Window cleaning business's are simple to run and account for. I've had a VAT inspection recently and I found it quite informative. They told me when they was due to arrive so I had things in general good order.
The visit lasted for about four hours at our business premises. The compliance officer will not touch your computer, he is not allowed to on a first visit. You need to be able to demonstrate that the software you use is fit for purpose and robust enough to be able to give accurate figures. You need to be able to produce reports and figures from the software when asked by the compliance officer.
Your VAT/TAX receipts need to be available to view and be in order. All bank statements etc need to be present. All goods purchased for business need to be available for audit.
The whole process is harmless if you have nothing to hide. They are very good at their jobs and like to drill deep down into the figures.
I personally wouldn't pay for insurance.
Hope this helps/
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That's helpful. I use Roundtracker and that tracks all sales and expenses. I only ever claim for legit business expenses and all bank statements are here. Everything is reconciled on a daily basis. I do a projected cashflow so I know what's coming up, and a P and L account to forecast/estimate my tax. The P and L is almost the same as the accountant produces lol. I'm not VAT registered so that's simple.
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So... how does the insurance work? What does it do?
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Its scaremainer in ,if loads of people get investigated do you think £85 would cover the work involved.
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Its scarenumptyer in ,if loads of people get investigated do you think £85 would cover the work involved.
No, but that's not how insurance works, is it? Do you think your van repair if you have an accident will be covered by your one premium? Of course not.
So, imagine an average accountant's fees for a tax investigation was, say £6,000* and one in one hundred businesses are investigated*, then the insurer would collect £8,500* and pay out £6,000* of fees. Happy customers, happy insurers, happy accountants.
Vin
* Don't argue the specific figures; they are made up to illustrate the point.
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Or am I right in thinking if you get investigated you have to stump up fees for the accountant???
I have an accountant but just for the end of year tax return.
I thought if you get investigated the only money you would have to pay is outstanding tax that hmrc decide you owe?
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Hi guys
My accountant does my tax return and P and L account each year. I've just received a letter from them (it's a multi-partner agency, not a single accountant working by themselves) saying that HMRC are conducting more and more investigations and such investigations take time and can cost a lot of money (in terms of accountancy fees).
They are suggesting an insurance policy to protect against such costs, for £85 per year. The insurance provider is Taxwise Services Ltd (http://www.taxwise-online.com/). Cheque to be made payable to them, not the accountants. Clearly the accountants will get a commission.
I'm trying to get a handle on how many people (you guys :-) ) have been investigated, how long did it take and what were the costs? Has anyone else had Taxwise or similar insurance and had cause to use it? Has anyone else been approached by their accountants suggesting such insurance?
I don't really want to pay another insurance, but can see that there are more and more investigations and whilst I am clean and all is in order it could well cost me more than £85 if I was picked as someone to be investigated.
Cheers
I'd be looking for another accountant if i got a letter like that off mine, inviting me to be ripped off for £85.
As far as i'm aware, its free to hand your stuff over to the HMRC for them to inspect it. I'd also ask the accountant exactly what that insurance payment might cover them to do that they arn't aready doing for you ?
Mind you they're owned by Peninsular Buisiness Services, what else can you expect.
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£85 is not a rip off, it's just an insurance policy, we get ours covered by being a member of the FSB
yes, it maybe free to hand over your accounts, but you will have to be able to answer any question they ask and accept the Hugh bill they think you owe.
I also understand that if you use an accountant even for basic stuff they will go through them for every detail using many, many hours of your accounts time and as most accounts will charge £50 plus an hour for an investigation you will have to pay the bill running into thousands of pounds even if you can justify every bill, invoice and cash brought in.
Darran
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Its scarenumptyer in ,if loads of people get investigated do you think £85 would cover the work involved.
I hope you dont have the same attitude with vehicle insurance.
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Vehicle insurance is a legal requirement ,tax investigation insurance is another revenue stream for your accountant / commission :o
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if i remember rightly i think ian giles has had 2 or 3 tax investigations ;)
my father in law had 2 and the time lost dealing with HMRC COST A DAMN SITE more than £80 ::)roll
so it seems good value to me .But you could go all your working life and not have an investigation.
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Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?
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Assuming you give your accountant the correct figures.
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I've had one of these. Believe me ... pay the £85.00. It cost me £1500.00 with full accounts by chartered accountants for 15 years of trading. Remember if they find an underpay they can at least double it as a penalty.
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Mines just charged me about £150, the cheeky git
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Your accountant goes off the information provided by each client if you have made an accounting error which you have not made your accountant aware off then you are liable not your accountant .
The one the one thing it does not insure is dishonesty . Mike
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If n insurance company charges 85 quid for there services then the odds of an investigation is very slim or they know they will never pay out anything to you. Check the odds.
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Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?
That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect. That's why it's an investigation; they are trying to find fault. Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you). The bill can easily run into thousands. So it might be worth considering insurance, at least.
However, each to their own.
Vin
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Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?
That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect. That's why it's an investigation; they are trying to find fault. Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you). The bill can easily run into thousands. So it might be worth considering insurance, at least.
However, each to their own.
Vin
Its only an investigation if HMRC suspect that you have been up to no good, what some of us will get is a random check which for
a sole trader wont come to much.
They might find that you owe a few quid owe nothing or find that you have paid too much, until the audit is finished the accountant
doesn't need to get involved as the results will be sent to you the tax payer.
If you get a large bill which you suspect is wrong then arrange for your accountant to sort it out for a price.
If that price is going to cost more than the bill then pay the bill, its not rocket science even though some accountants would
try and make you believe it was.
Again if the accountant has done his/her job right and you have been honest then there wont be loads of questions to answer
just make sure you keep all your paperwork from 6 years previous.
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Doesn't matter if the accountant has done it wrong anyway as your legal responsibility to check it and sign it off and any proper accountants these days get you to sign a waiver to say this.
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Again guys its nothing to be concerned about even if you have made a mistake. If your randomly picked to be
audited the HRMC will take your books look at your turnover and claimed expenses over a certain number of years
anything up to six.
If they find you have underpaid then you get a bill.
But again if your accountant has done their job right then this shouldn't amount to much.
If they find a pattern in your finances in other words a deliberate attempt to defraud then worry because that's
when they will go over your books with a fine tooth comb.
Ask yourself will this insurance cover deliberate dishonesty ? I don't think so.
I'm always careful when an insurance company has to tell you a lie in order to sell you a product, with more
self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.
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Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?
That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect. That's why it's an investigation; they are trying to find fault. Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you). The bill can easily run into thousands. So it might be worth considering insurance, at least.
However, each to their own.
Vin
Its only an investigation if HMRC suspect that you have been up to no good, what some of us will get is a random check which for
a sole trader wont come to much.
They might find that you owe a few quid owe nothing or find that you have paid too much, until the audit is finished the accountant
doesn't need to get involved as the results will be sent to you the tax payer.
If you get a large bill which you suspect is wrong then arrange for your accountant to sort it out for a price.
If that price is going to cost more than the bill then pay the bill, its not rocket science even though some accountants would
try and make you believe it was.
Again if the accountant has done his/her job right and you have been honest then there wont be loads of questions to answer
just make sure you keep all your paperwork from 6 years previous.
You're probably right; the tales from the FSB website of people being audited, the audit dragging on for two years and running up £3,000 bills despite being found not to owe anything are probably just scarenmo ngering. You'll definitely be fine as long as your records are OK.
Vin
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with more self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.
I'm sure this is a lie: from http://www.accountancyage.com/aa/news/2345496/hmrc-tax-investigations-count-rises-significantly
"THE NUMBER of people being investigated by the HM Revenue & Customs has doubled in one year, figures disclosed under the Freedom of Information Act show.
HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011/12.
The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years."
You'll be fine.
Vin
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with more self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.
I'm sure this is a lie: from http://www.accountancyage.com/aa/news/2345496/hmrc-tax-investigations-count-rises-significantly
"THE NUMBER of people being investigated by the HM Revenue & Customs has doubled in one year, figures disclosed under the Freedom of Information Act show.
HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011/12.
The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years."
You'll be fine.
Vin
I guess this answers part of my original question, about numbers being investigated. It seems that it is quite high. What I'm not sure about still is the costs involved, which is my primary concern (I run a legit business so I am confident I won't have a worry on that score). If an investigation includes a look through my books then they can fill their boots, and costs will be zero. If they want to take a fine tooth comb, they can do that but it might cost me something via my accountant, so £85 seems a small price to pay to cover that.
I guess I have some thinking to do.
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Yes I will be fine as I have a brother and a mate who have both been audited by the tax office
so I know the score.
My brother actually got an £800 rebate.
A two year investigation for a self employed window cleaner ::)roll For gods sake your not running Tesco's.
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For gods sake your not running Tesco's.
It would appear no-one is at the moment.
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I guess this answers part of my original question, about numbers being investigated. It seems that it is quite high. What I'm not sure about still is the costs involved, which is my primary concern (I run a legit business so I am confident I won't have a worry on that score). If an investigation includes a look through my books then they can fill their boots, and costs will be zero. If they want to take a fine tooth comb, they can do that but it might cost me something via my accountant, so £85 seems a small price to pay to cover that.
I guess I have some thinking to do.
FSB membership is £170 per annum. In addition to having tax investigation cover included, there are a raft of other benefits, like free banking (that pays you £25 a year!) and oodles of other stuff. If I was being asked for £85 for insurance, I'd add another £85 and go for FSB membership every time. Loads of benefits (including legal help). Worth a look, anyway.
Vin
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For gods sake your not running Tesco's.
It would appear no-one is at the moment.
;D