Many of you will be aware that the Government has implemented numerous strategies to close down tax avoidance schemes. What may be less known is that many of these schemes were offered by specialist scheme developers and promotors, often known as tax boutiques. As their marketplace dwindles, many have “phoenixed” their companies and can now be seen in areas such as capital allowances and Research & Development. These are attractive to them, as they come with percentage based fees and three year fixed terms.
Let’s take Research & Development Tax Relief as an example. I have been involved in making claims under this relief since its introduction, and as a firm we have a strong reputation in this area, backed up by client testimonials and case studies. However, this is a particular area many of these boutiques are now offering. Their approach takes two forms:
An approach to us on the premise that accountants don’t understand the relief, are not claiming the relief or are not maximising the relief. An offer I always decline as we have many more years’ expertise than these new entrants to the market.
An approach to clients, usually with a no win/no fee promise and a success fee being linked to the saving generated.
Firstly, we consider ourselves to be a proactive firm of accountants and tax advisers. Our recent shortlisting as ‘Best Tax Practice in a Regional Firm’ at the Taxation Awards echoes this. So if that relief is available to you then we would have brought it to your attention. Some instances will slip through the net; we are not perfect, so if such a boutique approaches you please bring it to our attention. Secondly, expect a tie in period of usually three years. Expect to pay far more than you would using a traditional fee structure of a fixed fee in advance or hourly rate. Finally, as these boutiques will not have any long term interest in their relationship with you, they may be less interested in dealing with problems that arise further down the line such as an HMRC enquiry into their claim for a relief.
Often, where such boutiques make tax claims they tend to push the boundaries to the extreme. Indeed a colleague of mine recently heard one say “if you don’t get an enquiry into your claim you haven’t maximised it”. Is that really what the majority of tax payers want? I doubt it.
Why are we mentioning this now? Well we are finding more and more of these boutiques offering services we already provide. We can cope with that. What we do find to be frustrating is the fact that they will use their marketing spin which they developed during the heady days of tax schemes to imply your current accountant is incapable of similar work.
Areas they are commonly getting involved with are:
All areas we, and other accountants, have being doing for years.
So next time you are approached by these boutiques just remember this article and don’t be pushed into a claim you may regret due to some clever spin. Even if you are tempted, please get in touch with us first so we can give you our opinion and, even if you do proceed, we can consider the required tax and accounting disclosures.
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