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Self-Assessment question

HubbleHubble New MemberRegistered Posts: 9
Hello all. I am not yet an MIP but rather an AAT affiliate working at a company to get my stripes to eventually become an MIP. That's the goal. I hope you don't mind if I ask you some advice. I am working in the tax department of a firm. We are going to be offering our self assessment clients the option of receiving any tax rebate they are due in advance of us receiving the rebate from HMRC. It is a risk which could ultimately incur some losses but my employers are willing to take that risk to attract new clients that want to be paid their refund quickly.

So in effect, we are proposing to pay the tax refunds (less our agreed fee) from our own funds and then will receive the actual refund from HMRC and keep it. I am wondering what the implications are with regards to operating this system in terms of banking. I am thinking that operating a client account is not appropriate in this case as each refund coming to us from HMRC is not actually the client's money - it is ours as we have already paid the client out of our own funds. Can anyone tell me what they would do in this situation? My thoughts are that if we open a new ordinary business bank account specifically for this purpose - to pay and receive rebates, that would be the best thing to do.

Any help or advice from you guys who have much more experience than me would be very helpful.
Many thanks


  • stevo5678stevo5678 Well-Known Cheltenham Registered Posts: 325
    Hi Hubble, without trying to be abrupt I have to say it is one of the most stupid new client tactics I have ever come across ! It's asking for issues if you ask me... However, it would in effect be a loan to the client and I'm not not sure if any professional body would allow this under their practising terms. Apart from the ethical side where it will certainly create an issue with the firms judgement due to it's personal interest I would expect this activity to fall into financial services with credit regulation and requirements being a consideration. After all of this, you would then be clearer on the banking requirements. A separate account at the minimum sounds sensible. Oh yeah, you would need to offer legal docs when 'loaning' the money and also possibly some sort of adherence to the 14 day cooling off period for distance selling if the client never agreed to the advance payment in person That's just my initial thoughts Cheers
  • GuestGuest Feels At Home Registered Posts: 73
    Agree with Stevo here,can see all sorts of problems, ethically and professionally. Wonga.com!!
  • JawzJawz New Member West MidlandsRegistered Posts: 53
    Hi Hubble, my personal thought on your question is that:

    1) your firm is: I assume and accountancy firm not a Financial service provider-i.e a bank providing loans
    2) By operating the scheme you're proposing, ethically your firm will have to proof that they don't self interest in the rebates from HMRC.

    I would suggest your employers seek further advice on the issue before operation such a scheme. Many thanks.
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