Beware of the HMRC Tax Rebate scam

As the Tax Return deadline is fast approaching, scammers are using this as a way of targeting unsuspecting taxpayers. They have stepped up their game by sending out yet another batch of fake tax rebate emails.

So how can you avoid becoming a victim of this?

The scam is that criminals send out an email, claiming to be from HMRC, saying that you are due a refund. It will then go on to say that you need to submit a tax refund request which will take between 3-6 working days to process it.

When you click on a link in the email you will be re-directed to a fake website resembling the genuine HMRC website, where you are asked to enter personal details such as your name, address, credit/debit cardnumber, expiration date, security code. It claims that it needs this information in order to credit the funds to your account. Once you have entered these details you will then be re-directed to the real HMRC website, and you will be oblivious to what has happened until you notice that money has left your account/credit card.

HMRC is fully aware of these emails and has consequently issued guidance to all taxpayers saying that ‘ HM Revenue & Customs will never send notifications of a tax rebate by email, or ask you to disclose personal or payment information by email’. HMRC recommend that you should always access the HMRC website by typing www.hmrc.gov.uk into your web browser address bar, rather than following any links inside emails.

It has also published a list of fake email addresses:
hmrc@gov.uk
service@online.com
info@hmrc.gov.uk
rebate@hmrc.gov.uk
altersonline@hmrc.co.uk
srvcs@hmrc.co.uk
customs@hmrc.gov.uk
refunds@hmrc.gov.uk
refund.alert@hmrc.gov.uk
mailto:annual.tax@hmrc.gov.uk
email@hmrc.gov.uk
and HMRC official guidance on the matter can be found on thier website here.

Some scammers, however, have decided to take an alternative approach other than just sending out emails. Some criminals have started telephoning tax payers to obtain their personal details by offering the bogus refunds.

As you may already be aware these scams are not new. So, as the tax return deadline approaches is worth being especially wary of any emails appearing in your mailbox that claim to be from HMRC. Any emails of this nature should be deleted immediatel

If you are a client of DEB Chartered Accountants then you will have been informed by us whether you have a refund due to you when we wrote to you when we sent you Tax Return for approval. If you have not received such a notification from us, and receive any email mentioning a refund view it with suspicion. If you have any concerns and would like to discuss this matter further, please do not hesitate to contact us.

Self Assessment Tax Return Filing Deadline

The deadline for filing a paper self assessment tax return to HMRC is 31st October 2012. If you miss this deadline the return must be filed electronically. You then have the following options:-
-         file online via HMRC website
-         Purchase third party software that will enable you to file the return
-         Use an accountant to prepare and submit your return

Each of the options has advantages and disadvantages as follows:-

Filing online using the HMRC website

This is the cheapest option (it is free) and possibly the best solution for simple returns. However, you do not receive any assistance and the more information there is, the higher the probability of getting it wrong. Penalties for innocent mistakes can still rack up if you accidentally understate your liability. Additionally, the HMRC website cannot deal with certain circumstances eg. if you need to complete the residency pages. Finally, you obviously need a computer with an internet connection.

Purchase third party software

Commercial software should deal with most scenarios and will produce all the relevant reports and file the tax return for you. The software can vary in price for a single tax return. Again, you do not receive any assistance, and the end result can only be as accurate as the information that you put in. It can be easy to take false reassurance that everything is OK because you have used commercial software. Again, you need an internet-enabled computer.

Use an accountant

Whilst this may be the more expensive option, it may not be as expensive as you think. You have the benefit of experienced accountants and the reassurance that the correct information has been filed. You simply provide them with the source documents and let them do all the hard work. You can be confident that when they tell you your liability (or refund), it is correct and you do not get any nasty surprises. Often they may be aware of tax reliefs that reduce your liability, or even get you a tax refund, and this can more than compensate for the fee for completing the return.

Although you may not need to complete a tax return, often it is worthwhile using an accountant to prepare a tax claim on your behalf – for example if you use your car for business mileage and are not reimbursed the full 45p per mile that is allowed to be paid tax free.

If you have missed the paper deadline, or would like the reassurance of your self assessment tax return being professionally completed, or wish to make a tax repayment claim then please do not hesitate to contact us at DEB Chartered Accountants.

Second by all Accounts – again!

Next Thursday we will be attending the Barnsley Conference and will proudly be able to display the framed certificate that we received for being Highly Commended in the Innovation and Technology category of the Barnsley and Rotherham Chamber of Commerce Awards hosted at Magna last Friday night.  We were disappointed not to have gone one better and won, but must express our sincere congratulations to S3 ID who were winners of this section on the night.

Though disappointed at not winning, on the night we were delighted to have been in the running, and eventually to have received the Commendation.  The evening was really well presented and organised by the Chamber of Commerce, and everyone seemed to enjoy a special night in a wonderful setting.  The table we sat at was especially successful, with two parties being winners and the other two being ‘Highly Commended’.

It was extremely pleasing for our continuous efforts to improve the benefits and services for our clients to receive local recognition.  It was noticeable that we were the only accountants that appeared amongst the nominees for any of the awards.  The words “proactive”, “innovative” and “different” proliferate on the websites of many accountants, but to what extent are such claims valid if they simply use the same software to produce more or less the same things for their clients.  At DEB Chartered Accountants we believe that to be proactive requires additional activity, over and above simply going through the motions;  being innovative involves a degree of creativity rather than simply using products that are  widely available to all accountants; and being different means being able to provide something that others cannot.  At DEB Chartered Accountants we feel we have a long way to go, but at least we have set off on the journey.  We are excited at the possibilities that our current developments will provide when completed, and are delighted that we have received recognition from the first local award that we have entered.

Coming second has become something of a habit.  We have come second no less than four times in the Innovation and Technology category in the 2020 Innovation Awards.  2020 Innovation operates both nationally and internationally and is the UK’s largest Accountants membership organisation.  Despite being runners-up on these occasions, we did however manage to win their award for Innovation in Technology in 2008.  We believe that no other accounting firm in the country has such a record of success in the 2020 Innovation Awards.  The term “Second by all accounts” was the headline used by the reporter in the Barnsley Chronicle on the last occasion that we came second.  We hope that our application next year can go one better.

DEB Chartered Accountants strive to continually improve the services we can offer. We feel that this is an objective that all successful firms should work towards, and in this regard, would like to again express our congratulations to the winners of all the awards on Friday evening, all the nominees, and all those that entered applications. If you look at our previous blog post Congratulations to Awards Nominees you will see we have encouraged any businesses, who believe that they provide “excellence” to their customers, to join our group on Linked-in called “Excellence in Yorkshire Business”.  The objective of this group is to share ideas to enable us all to benefit from new and innovative ideas that in turn can be applied to our own businesses.  We would be delighted to receive your applications and look forward to welcoming you to the group.

If you are attending the Barnsley Conference on Thursday please take the opportunity to come to our stand and say hello.  We would be delighted to meet you.

Congratulations to Awards Nominees

Today is going to be a great day for businesses in South Yorkshire as the Barnsley and Rotherham Chamber of Commerce hold their Awards dinner at Magna.  DEB Chartered Accountants is proud to have been nominated in the Innovation and Technology category along with four other businesses and, whether we win the award or not, are honoured to have been included on the short list along with the others who have been independently identified as having achieved excellence in their business in one form or another.

The same can be said for all the other entrants shortlisted in the other categories, as well as all those who made entries but did not get shortlisted.  As with all awards, there can only be one winner, but that does not detract from the contributions made to Yorkshire business by all the applicants.  All of them can be justifiably proud to have made a difference in their business sector.  The words “proactive” and “innovative” and such like are readily used by many businesses to describe themselves.  However, it is only those that do something to be proactive and innovative that can make such claims with sincerity.

No doubt the winners of each category will receive due appreciation and publicity for their achievements.  And we commend all those that are deserved of such acclaim.  However, we feel that all the applicants should be commended and that their story should also be told.  We at DEB would definitely like to hear your story as we feel that a lot can be learned for your own advantage from listening to the success stories of others.  If any of the applicants are willing, we should be most grateful if they would email us a copy of their applications for the awards to david@deb-accountants.co.uk   Whilst self praise is not really valid praise, praise does have validity when conveyed by others.  Subject to your approval, we would like to edit these into a book so that the benefits of the vision of the exceptional businesses that have applied may be passed on to others.

We have created a new group on Linked-in called “Excellence in Yorkshire Business” and would invite all that have achieved a degree of “excellence” within their business to apply for membership.  The objective of the group is to enable like-minded people to meet in a non-sales environment to listen to, and benefit from, the great things that have been achieved.  Subject to sufficient demand we would like to hold periodic meetings for members at DEB House in Barnsley to enable them to actually meet.

We would like to take this opportunity to congratulate, not only all the award winners, but all the entrants that have done great things in their business.  Please come tonight armed with your business cards and seek out my wife Janice and I, both of whom would be delighted to meet you and listen to the wonderful things that you have done in your own businesses.

We are looking forward to hopefully meeting you this evening and, no doubt to a great night out.

David Edwards-Brown
Director
DEB Chartered Accountants

Workplace Pensions – We’re all in!

 Are you?  If you’re not… you really need to be!

Have you seen the adverts that the Government are now showing on TV.  If you haven’t then you soon will.  Due to rising concerns over looming pension shortfalls, and in light of many people not making sufficient financial provision for their retirements, major pension reforms are being brought in. These workplace pension reforms will affect all employers and are another instance of the Government bringing in sweeping changes aimed at reducing their costs, and passing the expense and time burden on to businesses. If you have, or intend to have in the future, employees working for your business these new reforms will be applicable to you.

The new pensions legislation is being introduced from October 2012 and will affect all businesses with employees.  This is not a time to bury your head in the sand. If you do not act quickly and start to put plans in place it could have seriously detrimental implications for you and your business:

  • It will cost you 3% extra on your payroll
  • You could face a fixed penalty notice of £400 and be fined £500 per day for non-compliance
  • Potential 2 year prison sentences for wilful failure to comply with the requirements
  • An administrative nightmare if you do nothing and leave it to the last minute. This is in addition to the Real Time Information reforms which will impact from April 2013.
  • You will have little option but to fall in line with the Government Based Schemes such as NEST and the People’s pension. Early action will give you the option of setting up other government endorsed pension schemes which will offer you far greater flexibility.

All the above can be avoided provided that you understand what the requirements are, how they affect you, and take action now rather than leaving it till you simply have no choice.

As part of our proactive approach at DEB Chartered Accountants in advising our clients, and other local businesses, we will be providing, at our own cost, a series of seminars aimed at providing business owners with the insight to enable them to keep their costs and admin to as little as possible, whist fully complying with the new regulations. We feel that now is the time to start addressing the upcoming changes and would therefore like to invite you to intend one of several seminars we will be holding at DEB House during November 2012.  We anticipate demand will be high but are keen to keep the number of attendees at each seminar to no more than 8. In light of this we would kindly request that you contact DEB Chartered Accountants on 01226 245824 to book your place. The seminars will be held on the mornings of the 14th, 20th and 22nd November.

Unfounded Payments to Directors

Not Changing with the Times
Do you simply take what you want from your company and make payments for private purposes and expect your accountant to sort these things out for you when your accounts go in for preparation? If you do then there is an urgent need for you to change.

Legitimate means of withdrawal
Funds need to be taken from a company by one of a number of legitimate means. Each of these has legal or procedural requirements attached to them. If your accountant retrospectively pretends that you had a salary, or that you voted dividends, then this is extremely dangerous. In the opinion of one learned speaker on tax this is nothing short of fraud.

Why is this an issue now?
HMRC have won a significant tax case (PA Consulting v HMRC) in which they have successfully argued that payments to participators that were designated as dividends should be treated as pay subject to PAYE. Following this success it is possible HMRC will use this ruling to attack your company and the way in which you extract money from it.

Why you need to change the way you take money from your company
1. HMRC can assess you to PAYE on the money
You can no longer simply take whatever you like from your company and rely upon your accountant to sort it out. Such action has always been easy for HMRC to attack, but in light of the ruling of the P A Consulting case you would not be able to substantiate that the retrospective attempts to establish minimum salaries and fictitious dividends has any substance. Consequently a reclassification of such payments as salary would cost you significantly in tax.

2. You are missing the opportunity to extract funds tax efficiently
There is a strategy required for taking salary and dividends that you need to be aware of. By carefully planning your withdrawals, and processing your salary and dividends in the right way, you can minimise your tax liabilities and avoid unexpected tax bills that can arise if an accountant’s fix is put into place to correct all your un-planned and un-documented withdrawals.

3. Changes coming for PAYE
New changes are coming for reporting PAYE payments on a monthly basis. This will prevent you from processing salaries retrospectively as fines would be imposed for not doing them correctly. Further, by not processing the salaries using the PAYE scheme, as is done with retrospective salary adjustments, you are losing out on the National Insurance credit that establishes your right to your Retirement Pension.

4. Unsupported withdrawals are illegal
If you are not withdrawing money in the appropriate ways, then the withdrawals are technically illegal. As well as costing you more in tax, you will also find that you could be required to repay them personally should your company go into liquidation.

By taking salary and dividends in a correct manner you can resist claims from HMRC that all the money you extract should be subject to PAYE. Furthermore, if you have an understanding of the optimal extraction strategy each year, then you can plan your withdrawals to minimise your tax liabilities.

Call to Action
This is an issue that your accountant should have discussed with you. If they haven’t, then perhaps you need to consider making a change.

At DEB Chartered Accountants we have always emphasised to our clients the importance of the way in which funds are extracted from their companies. We provide direct assistance to help ensure that fund extraction is processed appropriately. More importantly, we discuss with our clients the precise strategy for them to implement in order to minimise their tax liabilities and ensure that they do not get unexpected tax bills arising as a result of remedial repair work.

Not currently a DEB client?
If you feel that you are not getting proactive advice from your accountant on this and other issues, then please do not hesitate to contact us. As well as providing specific advice to all our clients, we also use our DEB Connect (our bespoke information distribution system) to send regular tax update notifications each month to our clients to ensure that they are fully aware of tax issues that are likely to affect them. We would be more than happy to discuss this with you in our free introductory meeting.