Accountant Tax Refund

maureenbulman

Good Morning,
im wondering if anybody can help.My husband used to work offshore,he was due a tax rebate and got in touch with company on the internet about (seafarers allowances).Now this company he contacted got what my husband was due paid into there bank account £12,423.00 way back in Sept 2014.

My husband was sent £1,500 in 2014,he has just received £11,273.00 last week.

Does anybody know what the interest would have been for the past 3 and a half years when this money was lying in this tax accounts bank account.And also do you think i should persue this.

Tax Accountants bank is the Norwich and Peterbrough.

Thanking You in Adavance.

Alexland

If I understand you correctly he has received an additional £350 in interest as a result of the late second payment? So that's about 1% per year which isn't bad really.

ianthy

I was recently given 8% per annum for 7 years for a late payment/refund due from M&S account. It was initially zero until I asked them to confirm the interest they would be paying based on holding my funds for 7 years without notifying me.

bowlhead99

maureenbulman wrote: »

Good Morning,
im wondering if anybody can help.My husband used to work offshore,he was due a tax rebate and got in touch with company on the internet about (seafarers allowances).Now this company he contacted got what my husband was due paid into there bank account £12,423.00 way back in Sept 2014.

My husband was sent £1,500 in 2014,he has just received £11,273.00 last week.

So just to be clear on what your husband was doing, your husband was due a rebate because he had paid too much tax and wanted to claim seafarer's earning deduction for the relevant period. Instead of reading up on the rules and confirming to HMRC that he qualified for x days or x% of a year's claim, he instead gave his information to a company on the internet and appointed them as his agent to do his tax return and receive the refund on his behalf, to pass on to him in due course?

Assuming that's the case, then any fee that he needs to pay them for the service, and any interest that they might have agreed to pay him for money they are holding on his behalf from time to time, will be set out in the terms and conditions he signed up to - presumably you kept a copy? Interest on client money held might be at 'x%' or 'base rate plus 0.1%' or it might be 'whatever we get from Norwich and Peterborough on the business current account that your money is sitting in'.

Does anybody know what the interest would have been for the past 3 and a half years when this money was lying in this tax accounts bank account.

The interest they get from N&P depends on what kind of account they have. If it's a Business Extra account or Client's Reserve account or Netmaster Business account it will have paid a variable rate that's been 0.1%, 0.25% and 0.5% at various times since the start of September 2014; however some of those accounts only pay interest on the first x thousand pounds in the account, so if the company already had £100k in the account from other clients they would earn £0 from your husband's money being put in there as well (though unlikely they would use such an account for client money). There are other N&P accounts which pay 0%. Difficult to speculate on their banking arrangements.

And also do you think i should persue this.

I wouldn't bother, but it depends how much time you have on your hands and how you value it. If you do, start by checking how much their terms and conditions that your husband signed say that they will pay on cash held on account, as expecting any more than that would be an exercise in futility. Was there a reason why you didn't pursue the cash three years ago?

Doing the basic maths: You say they received 12,423 and only paid over 1,500, there was 10,923 remaining for them to hand over. By paying you 11,273 they have given you 350 of interest. 350 of interest on 10923 is 3.2% in a little over 3 years, or close to 1% for each year, which is higher than the various types of N&P accounts I mentioned above.

What you might find is that actually HMRC paid them 12423 of tax owed and also some interest on top of that for the time difference between the end of the relevant tax year and the date they received and processed the claim. So the amount of money being paid to you now might be a mixture of HMRC interest and interest earned in their accounts while they waited to ensure HMRC would not come back and challenge the claim. Or maybe the 12423 already includes interest from HMRC, and the interest earned in the client account was only £100, and they are including a flat £250 goodwill gesture to apologise for taking time to hand over the cash. We can only speculate.

However, I wouldn't go expecting 8% as the poster above mentioned receiving as compensation from M&S. You said your husband 'used to' work offshore so presumably doesn't need to make further claims for which he'd be appointing agents to handle on his behalf. If he does have further claims to make, he can just give the relevant facts to HMRC and not need an agent at all. So if there is no future work for them, there is no incentive for them to pay him more than the bare minimum they have agreed, and little point in you spending time pursuing a 'goodwill' claim.

Malthusian

The 8% ianthy mentioned is the standard calculation used by the Financial Ombudsman. It is 8% simple interest, not compounded. M&S paid him 8% simple interest on the basis that if he went to the Ombudmsan they would probably award him that and it saved them the bother of responding to the complaint.

(It sounds generous over short time periods but is less so over long ones - for example, if Ianthy's late payment had taken 20 years to be paid rather than 7, 8% simple interest is equivalent to less than 5% compound interest. And in the early part of that 20 year period banks were offering considerably more than 5% compound interest.)

This however only applies to the OP if the firm was regulated by the FCA and they have a complaint they can take to the Financial Ombudsman. The OP has not said which firm they used but given that it's a firm they found over the Internet to claim tax rebates, it is quite possible it is not FCA-regulated and not subject to the Financial Ombudsman.

bowlhead99

Malthusian wrote: »

T
This however only applies to the OP if the firm was regulated by the FCA and they have a complaint they can take to the Financial Ombudsman. The OP has not said which firm they used but given that it's a firm they found over the Internet to claim tax rebates, it is quite possible it is not FCA-regulated and not subject to the Financial Ombudsman.

Yes, usually you would expect the people selling tax claim services (the ones that are legitimate services rather than just scams) to be firms of accountants or solicitors, as acting as a client's agent to a tax authority to help with filings or returns is something that is pretty easy for such firms to do.

In doing most of the financial-type stuff they do, solicitors or accountants would not responsible to or registered with the FCA, but simply a member of their own industry body which allows them to do in a limited way some things that FCA firms could do. If you are a law firm for example, the solicitor's regulation authority would supervise you for some light financial services areas and you could apply for direct FCA permissions if you needed them. But simply collecting information about a client and passing the information to HMRC as agent is not something in scope of FCA's remit.

So the FCA won't care if you get a payout or not for your complaint, because doing someone's tax return is not consumer credit or depositary business like ths stuff M&S bank might do.