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HMRC Tax Rebate Debate. Will it Affect You?

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Some tax rebate companies who were entrusted to make rebates on behalf of their construction working clients, are having to pay thousands to HMRC. This is due to false or over exaggerated tax claims, and as a result their clients may also be paying. Does it affect you?

Since the introduction of the new coalition government, HMRC have been instructed to look at all possible ways in which they can increase revenue. Two ways they can achieve this are either by collecting more new tax, or reducing the amount of benefit they pay out. With the closure of all local tax offices, HMRC’s resources are limited, making all their enquiries a very long and difficult process.

Another way in which revenue is being increased is by attempting to claim back money they feel has been wrongly paid out or falsely claimed.

Last year HMRC processed 29 million repayments to individual tax payers, totalling a massive £1.9 billion of collected tax being paid back out. A large percentage of those payments were within the construction industry.

As a result, over the last 6 months, HMRC have specifically been concentrating on investigating all companies that assist individuals in the construction industry obtaining tax rebates.

To do this, HMRC are investigating hundreds of companies that ‘specialise’ in securing tax refunds. Their aim is to eliminate false and overinflated claims, therefore clawing back a percentage of the £1.9 billion already paid out last year alone and ensuring that future payouts are legitimate. The aim is to reduce HMRC’s future outgoing tax rebates.

The investigations are pretty straight forward, although some of the results have been rather mixed. HMRC begin by arranging a visit to all tax rebate companies, interrogating their processes and physically checking a number of random individual historic claims. If a company is found to not be adhering to strong enough procedures, the punishment can be very severe.

Dependant upon HMRC’s findings, punishment can vary but is not limited to one, or a combination of the following:

  • Implementing tighter procedures.
  • Opening enquiries to EVERY SINGLE tax rebate that company has done for the 2011/12 tax period.
  • Taking back 10% (possibly variable) of ALL rebates from ALL clients that have already been paid out. No matter how accurate or inaccurate the claim for the 2011/12 tax period.
  • A £50,000 fine as of April 2013.
  • Prosecution in certain circumstances.

With every discovery of an inaccurate claim already paid out, HMRC will approach the individual tax payer directly for any monies owed back (whether the individual made the claim themselves or instructed a company to act on their behalf). Additionally, a fine can also be imposed and is payable by the tax payer. This demonstrates how important it is for the tax payer to choose the right company to make their claim.

HMRC’s mission is to wipe out the companies that cannot be trusted and scare off all the audacious individuals making false or inaccurate claims. This will ultimately lead to fewer tax refunds being paid.

This week Express Tax Claims underwent the review outlined above. Cooperating fully with HMRC, they are pleased to inform that their meeting was 100% successful.

Why? Not only do Express Tax Claims have a proven track record, they have had no amendments made to ANY individual enquiries; they also fully understand and adhere to HMRC legislation. Express Tax Claims has proven that they are a trusted repayment company, genuinely specialising in their field and every one of their clients can benefit from this undisputed reputation. Express Tax Claims’ ethical approach gives confidence to clients and HMRC alike.

There will be no alterations to claims already paid out, no individual enquiries, no fines and no prosecutions. Not all companies in this field can say the same and there are more companies yet to be reviewed. The industry will not be surprised if other companies offering this type of repayment service do not serve as well, affecting not only those companies pockets, but also a large number of their clients’ pockets.

In conclusion, HMRC not only trust Express Tax Claims, but are happy with all their clients, making them one of the best priced repayment companies there are.

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