HMRC holding account?

Is my accountant holding money?

Didn't find your answer?

Hi,

We put our tax return in on time and after waiting for 8 weeks I contacted the accountant. I had no reply at all so contacted hmrc who told me the money had been paid into our accountants bank account on the 17th May 2016.

I eventually received a text message! From the accountant who advised that they do not have the money but that it has gone into a holding account for security checks, that this is normal procedure and that we just had to sit and wait.

It is now 5 months and we still have heard nothing. I have again tried calling and texting the accountant but I have had no response. 

My question is, is this true? My husband has been in business 20 years and this has never happened. Im beginning to get very suspicious and wondered where we go from here?

Hmrc have told us there is nothing they can do and that we have to pursue the matter ourselves.

Many thanks 

 

Replies (49)

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David Winch
By David Winch
24th Oct 2016 11:36

Is your accountant a member of a professional body? You can usually tell from his headed notepaper - he may describe himself as, for example, a Chartered Accountant or he may have letters after his name, for example FCCA.

David

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Replying to davidwinch:
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By ZoeT
24th Oct 2016 11:45

She has never sent anything in the post. We received a phonecall to advise us of the refund.

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Replying to ZoeT:
David Winch
By David Winch
24th Oct 2016 11:56

When you first instructed the accountant she should have sent you a letter confirming your instructions. Did she never write to you asking you to bring in your figures, etc?

Does she have a website which gives more information about her firm? Does it say anything at her premises about her?

David

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Replying to davidwinch:
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By ZoeT
24th Oct 2016 12:21

Hi,

Everything was done via the phone. When we made the appointment she told us exactly what we would need to bring along. Nothing has ever been sent to us in letter format.
She is on most search engines, it gives her full name, number and address details.

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Replying to ZoeT:
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By Harrison88
24th Oct 2016 12:42
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Replying to Harrison88:
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By ZoeT
24th Oct 2016 13:17

I'll have a look. Thank you,

Zoe

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Replying to ZoeT:
David Winch
By David Winch
24th Oct 2016 12:59

It seems likely that she is not a member of a professional body of accountants - which is a pity because if she was then you could complain to the professional body & that might bring a swifter result.

HMRC do sometimes hold up refunds - but not for as long as you have been waiting. It sounds like she has your money & has not paid it on to you.

If you do not get any response from her then go & see a solicitor & get him to write demanding payment.

David

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Replying to davidwinch:
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By ZoeT
24th Oct 2016 13:16

Ah okay, I was hoping you were going to say it's normal. We are definitely suspicious so I'll take your advice and see a solicitor.
Many thanks for your help.

Zoe

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Red Kite
By Red Kite
24th Oct 2016 11:41

To clarify - your husband's tax return, once processed by HMRC, was expected to produce a refund of income tax, for 2015/16?
Were you advised, by the accountant, how much the refund was?
I'm assuming that, if a refund was expected, the accountants fees would be offset from part (or all) of the refund?
I'm of the opinion that you need to put more flesh on the bones, so to speak, so that contributors can have more information to consider?

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Replying to Red Kite:
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By ZoeT
24th Oct 2016 11:47

Hi, yes we received a call from the accountant to say that we were due a refund of £4900 and that she would deduct her fee of £500 when the rebate had been received from hmrc.

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Red Kite
By Red Kite
24th Oct 2016 12:25

OK, in essence, it seems to me that, in the first instance, an appointment needs to be made to discuss all your concerns in further detail.
From what you've said, the accountants' fee should have been discharged from the gross refund and, somewhere, the accountant is holding funds, which are due to your husband, of £4,400 - a not insubstantial amount?
I'm a tad surprised that you've not challenged this, in a much stronger fashion, in the last five months?

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By SteveHa
24th Oct 2016 12:28

The only way that HMRC would have paid the refund to your accountant would have been if they had an explicit authority to do so, for example on the Tax Return that you approved for submission.

Is that authority there?

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By NYB
24th Oct 2016 12:49

When a self assessment is submitted the accountant has to be authorised by the client as to how any refund is to be made - directly to the client or to the accountant. Any refund to the accountant has to go into a Clients account - not any old bank account. There are strict rules on this. Monies should be repaid immediately. However if there is a fee due to the acct then agreement can be made to use this money towards the fee. Any suspected wrong doing should be reported immediately to whatever professional body your accountant is with

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Replying to NYB:
David Winch
By David Winch
24th Oct 2016 13:02

NYB wrote:

When a self assessment is submitted the accountant has to be authorised by the client as to how any refund is to be made - directly to the client or to the accountant. Any refund to the accountant has to go into a Clients account - not any old bank account. There are strict rules on this.

There are rules - but they only apply to accountants who are members of a professional body (which it seems she is not). So the money may have gone into her general business or personal bank account & could be difficult to recover.

David

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Worm
By TheLambtonWorm
24th Oct 2016 12:50

It's true that these security checks are normal procedure (albeit infrequent), and then can take anything between a few weeks a few months.

They are a pain in the backside from the accountants point of view, as the client can easily think the accountant is messing them about.

5 Months does seem unusually long though, although not impossible.

What isn't normal - is that the accountant isn't contactable, and therefore seems a terrible accountant. Change to a better one.

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Replying to TheLambtonWorm:
By Tim Vane
24th Oct 2016 13:02

That is utter rubbish. There is no requirement for her accountant to perform additional checks once the refund has been received from HMRC. Any id checks should have been completed BEFORE the return was submitted, not afterwards. It is certainly NOT normal for the accountant to hold onto the money for more than a few days in this instant, and holding onto the money for this amount of time after the client has asked for it is unethical and probably illegal.

Frankly, this sounds like a rogue accountant and if the money is not forthcoming I would contact a lawyer.

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Replying to Tim Vane:
Worm
By TheLambtonWorm
24th Oct 2016 13:38

I can't quite tell if this post is a reply to my previous post or not, as I'm on my mobile.

If it was directed at me, the security checks that are being referred to are HMRC's internal checks.

Have you never had this happen to any of your clients? Perhaps you don't deal with any subcontractors.

It's just a random check they do and can (very infrequently) take bloody ages to sort out.

The HMRC software records the refund as being issued, although it isn't often physically made until a future date, once their security checks have been completed.

I've seen some take in excess of 3 months to be actually paid fr the point the return is processed, although only a handful have ever taken that long...and none recently.

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Replying to Tim Vane:
David Winch
By David Winch
24th Oct 2016 13:43

Tim Vane wrote:

That is utter rubbish. There is no requirement for her accountant to perform additional checks once the refund has been received from HMRC.

I think the suggestion is that HMRC have accepted that a refund is due & have posted it to the taxpayer's account on their system but have not actually released the payment as HMRC (not the accountant) are making further security checks (for example, to inhibit fraudulent repayments).

David

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Replying to davidwinch:
Worm
By TheLambtonWorm
24th Oct 2016 13:45

Indeed, David.

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Worm
By TheLambtonWorm
24th Oct 2016 14:02

My advice would be to first phone HMRC and ask if the refund has been physically paid (as opposed to being processed), and the date it was paid following completion of the security checks as opposed to processed before contacting a solicitor.

I'd probably speak to 2 or 3 different people at HMRC too, as they often can't tell the difference between being paid and processed.

EDIT: If the person at HMRC tells you the payment date was 17th May 2016, then tell them to check again as I believe it's extremely likely that this was the processing date.

It could simply be a case that someone at HMRC lost the piece of paper that had the details of the security check on, and the accountant may only be guilty of not chasing it up.

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By rememberscarborough
24th Oct 2016 13:47

This is why anyone who advertises their services as an "accountant" should be held to a far higher standard than others. Many people, like Zoe, use us because it's scary dealing with HMRC much like we'd probably use a solicitor if we had to deal with the courts.

Some on here may shake their heads but if a doctor gave you medical advice and said it was normal would you question it?

I really hope this problem is all above board and is solved quickly but people on here need to realise that their clients trust us and we need to respect their fears rather than asking daft questions that we know the clients wouldn't have thought of.

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By lesley.barnes
24th Oct 2016 14:15

Does your husband have access to his online account? Can you see a copy of the submitted tax return and or details of the refund? That would show you which bank account the refund was going to, who had authorised that it went to the accountants bank account. Seeing if its being held in a holding account isn't possible because I've had money "disappear" off the system into a holding account whilst further checks are made.

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By Manchester_man
24th Oct 2016 14:28

I think that what the OP is saying is that HMRC have advised that the repayment HAS been paid to the accountant.

The accountant, however, is saying "I've not received any money yet - it is taking a while as HMRC are putting it through security checks and this is taking time, although it is normal procedure".

As stated above, whilst security checks do take place, they don't usually delay a repayment by 5 months, however, I believe that the accountant is using the security checks 'chestnut' as his excuse to the client as to why the client has not received the repayment.

The real reason seems to be that the accountant has spent the money and is now panicing, giving excuses and burying her head.

This is how it appears to me.

Simple solution. Ask HMRC where the repayment is [the OP says he/she has done this and HMRC state that the accountant had had the repayment.

Therefore, ring the accountant and explain what HMRC have said and demand that they pay the money to you immediately, otherwise you will be reporting the matter to the Police.

Then, sit and wait, bit have the phone number of a Lawyer on speed dial...

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By ZoeT
24th Oct 2016 14:49

Many thanks for your replies.

Yes he's a sub contractor and this is the first time we have used this accountant as his previous one retired. I have chased this up many times, I was told to sit and wait patiently... So I have up to now!
Hmrc have told me they have refunded it, they have given me the name and account details of where it is, and this is definitely the accountants bank account.
The accountant has explained that this is partly true however it is being held back by hmrc to go through further security checks. The last I managed to speak to her (September) she told me we just had to be patient and that it can take anything from 1-12 months to clear.
Reading your responses it is clear that this is incorrect, and I will be taking further action.

Many thanks

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Replying to ZoeT:
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By rjoconnor81
24th Oct 2016 15:07

I have seen this only twice, but HMRC system and the on-line support were saying the money had been refunded. The money had been stopped by another department in HMRC for a security check, but you can't speak to that department and they don't make out going calls. When I logged onto both our agent system and my client logged onto their own account the repayment was showing as being paid, which it clearly hadn't. Both of these refunds took about six months to get back from HMRC and only after I threatened them with legal action as the money wasn't theirs to keep and there is a legitimate enquiry process in place if they wished to enquire into the return.

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Replying to rjoconnor81:
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By ZoeT
25th Oct 2016 14:57

Hi,

This is the exact situation.

Can you please tell me how you found out, that hmrc still had the money please?

Thanks

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Replying to ZoeT:
Worm
By TheLambtonWorm
25th Oct 2016 15:06

I've already explained what you need to do more than once.

Perhaps I'm just not very articulate.

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Replying to TheLambtonWorm:
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By ZoeT
25th Oct 2016 16:49

Or maybe you just hadn't read what had previously been said?

You repeated advice that had already been given, and actioned.

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Replying to ZoeT:
Worm
By TheLambtonWorm
25th Oct 2016 17:06

No good deed, and all that...

I was actually the first to state the correct issue with the 'security checks' and state a simple way to sort it. I guess the layout of the forum doesn't make it apparent however.

If you had done what I suggested though, then you would have determined whether the issue was HMRC or your accountant by now.

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Replying to ZoeT:
Worm
By TheLambtonWorm
24th Oct 2016 15:18

Just phone HMRC again and ask them when the refund was PAID.

If they give you the same date as before, then it's likely that they are talking rubbish. Make them look further and ask them when the security checks were completed.

The payment wont have been made until after that date.

I believe that it's far more likely that HMRC are giving you the wrong information than your accountant is a fraudster.

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By lesley.barnes
24th Oct 2016 15:16

Zoe - when you said the accountant said it was partly true that the money was in her bank account did she elaborate on this? Either it is or it isn't. Have you and your husband thought about calling on the accountant if she isn't returning your calls?

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Replying to lesley.barnes:
Melchett
By thestudyman
24th Oct 2016 16:11

lesley.barnes wrote:

Zoe - when you said the accountant said it was partly true that the money was in her bank account did she elaborate on this? Either it is or it isn't. Have you and your husband thought about calling on the accountant if she isn't returning your calls?

Exactly, the accountant has the money or does not have it. There are no "security checks" if HMRC have released the payment and physically paid out. OP, you need to find out exactly if HMRC have made the repayment, the method, and the date.

The accountant ignoring calls is very unprofessional and it sounds more and more like the accountant has had the money.

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Replying to thestudyman:
paddle steamer
By DJKL
24th Oct 2016 16:45

thestudyman wrote:

Exactly, the accountant has the money or does not have it. .

.

Schrodinger's refund.

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Replying to DJKL:
Man of Kent
By Kent accountant
25th Oct 2016 13:07

DJKL wrote:

thestudyman wrote:

Exactly, the accountant has the money or does not have it. .

.

Schrodinger's refund.

What happened to his cat?...

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Replying to Kent accountant:
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By Dib
26th Oct 2016 13:36

Actually Schrodinger had two cats. One was called Lucky and the other er... wasn't.

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Red Kite
By Red Kite
24th Oct 2016 17:12

This is indeed a case in point, referred to earlier, by another member/contributor, where the question of honesty, integrity and communication are paramount.

I'm: QBE, 60 years old and, been active in the profession, since I left school at 17. I enjoy my work more than ever at the moment but, I go to extreme lengths to ensure that my client's enjoy the best possible service I can provide (one which I would hope I could also receive, were I on the receiving end).

The work which we do is common sense (generally) to us and, "rocket science" to some of our client's. Falling short on service, explanation and hiding behind the "complexity" has no excuse and has no place in my view.

There are bad apples in all walks of life but, I have suspicions in the background to this case, that all is not well.

Once you've resolved the matter, take some advice and seek recommendation before speaking to the next accountant.

The whiff, at the beginning of this thread has become a smell at this point. I've a hunch it could yet end as a stench!

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By CJaneH
24th Oct 2016 17:52

I have recently had a new client whose previous accountant (unqualified) was in jail for submitting revised tax returns for clients and arranging for refunds to be placed in their bank account.

My client had not realised he was also one of the clients who had been 'done'

My advice is

A Move
B report to HMRC

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David Winch
By David Winch
24th Oct 2016 21:59

You might phone the local authority Trading Standards Dept for the area in which the accountant operates & ask if they have had other complaints about this accountant.

They may tell you. If they tell you that they have had other complaints about her then draw your own conclusions!

David

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Replying to Private Eye:
By mrme89
25th Oct 2016 11:45

Private Eye wrote:

I have seen instances where refunds are recorded as having been made, but are not physically paid by HMRC until additional checks are carried out by an HMRC office based, I believe, in Bristol.

In the examples I have seen these additional checks have taken up to a year before payment was finally made.

Don't simply assume that the accountant is at fault. Throwing accusations around which prove to be untrue could prove very expensive for you. You need to write a formal letter to HMRC demanding that they pay the monies owed to you, or, explain why they have not been paid. Their response should tell you what you need to know.

Spotted.

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By justsotax
25th Oct 2016 11:13

I am always amazed at the speed with which reports/legal action etc are mentioned with minimal information or actual 'facts'.

Lets wait for Zoe to confirm once and for all if the money has been banked by the accountant or if it is still being security checked by HMRC.

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Replying to justsotax:
paddle steamer
By DJKL
25th Oct 2016 11:22

Far too reasonable, that is not how the legal process works West of the Pecos.

Find a tree, get a rope....

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By ZoeT
25th Oct 2016 11:53

I spoke to hmrc last night again and they confirmed again to me that the money wasn't pending but had been paid to the accountant on the 17th of May.
I have eventually received a text from the accountant saying she is in hospital. She hasnt mentioned anything of our money, but simply said that if I got a solicitor involved then she could provide proof that she doesn't have the money....it is so frustrating! Hmrc have said I should give it until the end of the week then they will let have their back office trace exactly where the money is

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Replying to ZoeT:
Worm
By TheLambtonWorm
25th Oct 2016 12:31

Did you ask HMRC when the security checks were completed?

The phone operator will just be looking at a date on a screen, and may be ignorant of these checks which may well not have been completed until after 17.05.16.

If you didn't ask HMRC that - then phone them again and ask them.

If HMRC say the checks were completed after 17.05.16, then it's almost certain that the payment was not made on that date. You will then need to push them to get the correct date.

If of course HMRC say that either there were never any security checks performed, or they were completed prior to 17.05.16 - then it looks bad.

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By justsotax
25th Oct 2016 12:11

so HMRC have confirmed the money left their bank in May and yet want to wait 2-3 more days as if it will be resolved in that time? It may well be the case that the accountant in question is tardy (at the very least) ... but given the apparent serious nature of the case I wonder about the Revenue....I would call back today - no point in waiting.

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Replying to justsotax:
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By ZoeT
25th Oct 2016 15:01

Exactly! I'm going to call them back this evening when my husband is home from work.

Thanks

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Replying to ZoeT:
Tornado
By Tornado
25th Oct 2016 17:36

The root problem here is that HMRC do not appear to have the correct information on their records and like others who have already commented, I too have experienced the situation where information on the HMRC Agent website shows that a repayment has been made but in fact, no payment has been made. When phoning to ask why, there is never a full and honest answer but I know that they often wait until someone queries where the money is before releasing it, just to make sure the refund is genuine.

In this case there seems to be no way to get HMRC to provide indisputable evidence of where the refund has been made to and when. If nothing else works, then perhaps a call to the HMRC Debt Management Team would help, they must have full access to the necessary information.

It will all work fine when MTD becomes mandatory of course ....

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Replying to Tornado:
Worm
By TheLambtonWorm
25th Oct 2016 17:57

I don't think it's anything deliberate on HMRC'S part - I just think that either the phone operator isn't trained properly or the computer system isn't clear enough for them to understand. Or both.

That's why they need to be told exactly what they are looking for so they can find the answer.

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By Debbie Danahar
26th Oct 2016 10:56

We have experienced this before where a disgruntled client approached us as they felt that their accountant was holding fees. It turned that the bank account number on the tax return was not that of the accountants as two numbers had been transposed. HMRC had made the payment but the accountant never got it! So both were telling the truth. You need details from HMRC of which account they made the repayment to. Good Luck!

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By pauljohnston
26th Oct 2016 11:29

Sadly "Accountants" running off with refunds appears to becomming more frequent. Perhaps HMRC should re-visit whether payments can be made to anyone except the taxpayer.

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