In February 2010 I was requested by an affiliate of the Certified Accountants to undertake the taxation work for a new client which he had taken on. Having known this accountant for about three years I agreed.
I was to undertake both the company’s corporate tax and the personal tax returns of the managing director. The other accountant would do the final accounts & book keeping.
In June of this year I issued two invoices. One for corporate tax which was paid and one for personal taxation which remains unpaid. I have sent the usual reminders and if necessary I was prepared take the matter to the small claims court.
However I received a reply from the client claiming that he had already paid for the personal tax as it was included in the monthly standing order paid to the another accountant.
Naturally I took this up with the other accountant and he sent me a copy of an email which he sent to the client in November 2009 and much to my surprise it states that the monthly fee includes personal taxation. He did say that latter on after I came on the scene that he told the client that I would issue separate invoices however I have not received any written confirmation of that. In March 2010 I did send this accountant a model engagement letter for him to use for his accountancy service which excluded taxation however it looks as if he never sent it on to the client.
Therefore do I invoice the accountant directly and then take him to court if he does not pay or do I issue a writ for damages against him. Should I also claim damages for a loss of future income. In addition I am very tempted to make a professional complaint about him because he withheld vital information from me.
Replies (7)
Please login or register to join the discussion.
More information needed
You say you issued two invoices but you didn't say who you issued them to.
My guess is that you issued them to the client of the other accountant. If the other accountant asked you to do the work then you should have invoiced the other accountant. I would cancel the unpaid invoice to the other accountants client and issue the accountant with the invoice.
I would ensure you know who your client is and issue engagement letters to the correct person.
If I were the the client . . .
I would not pay you unless I had signed a separate letter of engagement with you for the work. If that was not in place, that is not the fault of the other accountant.
If it is in place, you should pursue your claim against the client. If the client believes they have paid the other accountant for a service they have not received from them, that is a matter for them to discuss together and is not a reason for monies to be withheld from you.
.
Or in other words, apologies to client for the confusion, pick up the phone and discuss with other accountant.
No lawyers required.
Definitely discussion first
It's not nearly at a point for legal action or damages. If the client has a contract with the other accountant for personal tax, but no contract with it for you, then he owes you nothing. If he has a contract with each of you for personal tax, he owes both of you (and agreeing to pay 2 people for the same service is a bit silly). If your contract is with the other accountant, you take the issue up with him. Simples.
Isn't this a bit unusual?
Didn't you find out at the beginning who you would be invoicing?
If I undertake a task that I don't feel qualified for, or have insufficient experience, I discuss it with my client first, and allow them to decide if they want to engage the specialist direct (and therefore pay them direct) or for me to engage the specialist on their behalf. This makes a big difference to my liability!