Many of us have recently had to file our tax returns and paid the tax due.
We can be forgiven for feeling that the taxman is our foe at these times but is that the case…
When we read in the papers about certain individuals or companies getting away with not paying their taxes we’re outraged and we generally applaud the Taxman when he catches up with these ‘cheats’. After all, it’s the taxes raised that pay for our public services such as the NHS, Education etc.
There is something called the tax gap – it’s the calculation of the amount of tax that is theoretically due and the amount actually collected. It’s currently sitting at about £36 billion per year. It is considered that the UK has one of the lowest ‘gaps’ in the world and that it is reducing year on year.
So, is the taxman friend or foe?
At this point it’s worth considering the role accountants play in all this.
At Affordable Accountancy we take the view that we work for you and not the taxman (after all it’s our clients that pay our fees), and our role is to minimise our clients tax burden but always within the legitimate tax legislation.
Paid Too Much In Tax?
We have yet to meet a client that wants to pay a penny more in tax than they have to, and yet the chances are that many of us have actually paid too much tax.
Quite often we are able to identify for clients when they have overpaid – here are some examples of recent cases (last few weeks):
Taxman wrote to them saying they no longer needed to complete tax returns. However, when we looked into their situation, we submitted returns and managed to get them over £1000 in rebates. The money was in their bank account within weeks.
In taking over this client from their previous Accountant we routinely undertook a review of their tax situation. Result was a tax rebate of over £4000, again repaid by HMRC within weeks.
Approached us they needed to submit their tax return and the deadline was fast approaching. Everything was done and deadline met, just! In the process we identified that tax has been overpaid in the past. We are currently in the process of claiming back over £6000.
There are others, but hopefully this should convey the message that the taxman can be friendly and will (in most cases) promptly repay any overpaid tax.
You may be wondering what sort of fees were involved? All we can say is that the fees involved were less than £100 in each case.