Tax refunds into accountants bank account

[BolshieBastard]

In the self assessment return, my accountant filled in the accountant as the nominee - and their bank account - to receive my tax refund, and advised that I would be paid after the refund is received by them from HMRC. Any idea why this is done like this? Why not simply allow the payment to be received in my account? Is there any advantage in making the accountant to receive the refund in the first instance?

WTF!? There's no way Id stand for that. I get hacked off when agencies make me wait 10 days for settling an invoice so having your refund paid into the accountant's bank account is just madness.

[Alan @ BroomeAffinity]

Back in the day, when we dealt with a lot of refund cases, we did this so it may well be a hangover from that kind of thing in their systems. As Jessica says though it's not worth the potential reputational damage or the hassle to deal in client funds.

[Jessica@WhiteFieldTax]

Worked well for Darren Upton.

Yep, and look where it got him.

It's not worth any accountants reputation and livelihood to mess around with client money.

Equally, there is little need these days for tax repayments to go to an accountants client account nor, indeed, for anything other than fee payments to go to accountant. I closed my client account three years ago as it was bank charges for something I didn't need.

[TheFaQQer]

Worked well for Darren Upton.

I was going to make the same point

Send this guy round to get it back for you

[Willapp]

I've had this before with my accountant who I know and trust, and to be fair it didn't concern me at all. Rebate was only a few hundred quid, they took their fee out (agreed in advanced) and paid the balance to me.

If you trust your accountant then there's no reason to be suspicious of this, I think it just allows them to ensure the rebate is received and is correct so they could chase up on your behalf. But as others have said if this wasn't what you wanted then surely you could/should have challenged it at the point of signing the return?

[Maslins]

I think this tended to be popular with a lot of accountancy firms who work with CIS subbies. Clients virtually always in rebate position, accountant gets rebate in, takes payment of their own fee, then pays out balance to client. Pretty reliable way of getting paid, and the subby likes getting their tax return done, as it seems as though not only does the accountant not charge a fee, but actually gives them cash.

As Jessica says, ethical obligations around client money mean it should be held in a completely separate account to the accounting firm's cash.

Don't really see why a firm with Ltd Co contractor clients would do things this way though.

[mudskipper]

If they are a regulated firm then it would be clients money and go into a designated clients account, thus having no effect on practice cash flow.

If they are unregulated then depending on what standards are being worked to, it could be boosting their cash flow. Not good.

Filling this box in on tax return gives the accountant a little more insight into repayments coming through, but it's a throwback to the pre self assessment and pre fixed fee era, and not really necessary now.

Worked well for Darren Upton.

[Jessica@WhiteFieldTax]

It improves their cash flow?

If they are a regulated firm then it would be clients money and go into a designated clients account, thus having no effect on practice cash flow.

If they are unregulated then depending on what standards are being worked to, it could be boosting their cash flow. Not good.

Filling this box in on tax return gives the accountant a little more insight into repayments coming through, but it's a throwback to the pre self assessment and pre fixed fee era, and not really necessary now.

[SueEllen]

The obvious reason why they put in their bank details rather than yours is because they know their bank details, and it's quicker and easier to complete the form that way then chase people for the information.

Anyway you have reminded me to do something so thanks.

[tractor]

....

In the self assessment return, my accountant filled in the accountant as the nominee - and their bank account - to receive my tax refund, and advised that I would be paid after the refund is received by them from HMRC. Any idea why this is done like this? Why not simply allow the payment to be received in my account? Is there any advantage in making the accountant to receive the refund in the first instance?

After the accountant filled in the return form they must have asked you to sign it. If you had read it properly, you would have seen the tick box that authorised this. Why did you not question it at the time?

Always read the stuff you sign.

[SueEllen]

Why don't you ask your accountant?

[cojak]

It improves their cash flow?

[Abraham]

In the self assessment return, my accountant filled in the accountant as the nominee - and their bank account - to receive my tax refund, and advised that I would be paid after the refund is received by them from HMRC. Any idea why this is done like this? Why not simply allow the payment to be received in my account? Is there any advantage in making the accountant to receive the refund in the first instance?