What info does the prev accountant have to give?

I would like the previous accountants working papers - am I allowed them?

Didn't find your answer?

I took on a new client and requested info from the prev accountants which they sent to me (tax return and computation).

What I really need is how they arrived at the figures on the tax return as the calculation is quite complicated (being foreign income which is apportioned from very strange looking foreign pay slips) - are they allowed to withhold this at all or am I within my rights to specifically request their workings?

Many thanks

Chicka

Replies (16)

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By MBK
30th Nov 2016 13:12

This is a difficult area but, in general, workings done by an accountant from the client's records will be the property of the client so, even if they won't give you the details, they will be obliged to give them to the client if he / she asks.

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Worm
By TheLambtonWorm
30th Nov 2016 14:05

The working papers are (generally) property of the previous accountant - so you have no automatic right to them.

I don't think it's unreasonable for you to ask them for copies of their workings though.

Whether they think "you've taken the client, so you can bloody well work it out yourself", is a different matter though.

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By timothyvogel
30th Nov 2016 14:47

classic problem, 2 replies , 2 opposing answers, and both right. The working papers are the property of the accountant, the figures to allow the tax return to be completed are the property of the client so you can have those. All professional bodies insist their members should pass on sufficient documents to allow the next accountant to understand the tax return, because if they don't then the client cannot understand the tax return, so the first accountant must be negligent in their explanations.
Best bet ask, if they say no then see if they are members of any professional bodies, and ask again quoting their professional bodies website. if that fails threaten to tell client to sue for negligence.

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Replying to timothyvogel:
Stepurhan
By stepurhan
30th Nov 2016 15:17

timothyvogel wrote:
if that fails threaten to tell client to sue for negligence.


On what grounds? Unless the tax return has been improperly prepared, there has been no negligence. By signing the return, the client has stated they confirm the entries therein are correct. By signing, they have effectively said they did understand them and can't claim "negligent explanations" now.

I'm also not convinced that there is an entitlement to the detailed calculations anyway.

The new accountant is entitled to ask for the information they need to handle the new client's tax affairs. All that information will be held in the payslips. The OP should be able to recreate the figures themselves from those payslips if necessary. If they need another accountant to show them how to do that, maybe they should not have taken this job on.

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By Tim Vane
30th Nov 2016 15:09

I think I'm in the NO camp on this one. It sounds like you have all the information to support the tax return since you have the "strange looking foreign pay slips". I think it is unlikely that there is anything on the tax return that does not already appear on the payslips. The fact that you don't understand them and the other accountant did may only mean that you have taken on a client that you do not have the knowledge to act for. You can't expect the previous accountant to hand-hold you through the process.

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Replying to Pembroke:
By Ruddles
30th Nov 2016 23:51

Pembroke wrote:
once a client moves the previous accountant is quite entitled to shred his files and working papers if he wishes.

Tosh
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Replying to Pembroke:
By Ruddles
01st Dec 2016 10:02

More tosh

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By Matrix
30th Nov 2016 15:55

Why do you need to know how the figures were arrived at for a previous tax return that has already been submitted? Has there been an enquiry since I cannot see how last year's return has any bearing on this year's return. If an incoming accountant asked me for this I would suggest they are being lazy.

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Replying to Matrix:
paddle steamer
By DJKL
30th Nov 2016 16:09

Matrix wrote:

Why do you need to know how the figures were arrived at for a previous tax return that has already been submitted? Has there been an enquiry since I cannot see how last year's return has any bearing on this year's return. If an incoming accountant asked me for this I would suggest they are being lazy.

It can happen with say single entry property rental schedules, you need the working papers to see if any rents and costs have been treated as prepaid or accrued to avoid omission/double counting.

Having said that , as described by the OP, and presuming the vouchers he is examining are re an unsubmitted tax year, not sure why earlier years analysis needed, but pretty hard to say from information given.

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By Matrix
30th Nov 2016 17:00

Yes I agree it would be acceptable to ask for any accruals and prepayments since they could affect a future tax return as would capital expenditure on BTLs. However I do not see why you would need workings which do not affect a future return.

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Stepurhan
By stepurhan
01st Dec 2016 09:13

You would need to know about accruals and prepayments. That is because those are required to deal with the new client's tax affairs properly (as DJKL said, to avoid double counting).

But that is not the same as having the right to the previous accountants working papers. All they need to supply is the accruals and prepayments themselves. They are under no obligation to provide the detailed breakdown of all the figures in the return.

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Replying to stepurhan:
paddle steamer
By DJKL
01st Dec 2016 10:29

When what has been prepared is a schedule of figures for the rentals boxes there is in my experience unlikely to be distinct accruals/prepayments schedules in the working papers ,if single entry (which is the most common approach) there is likely to only be details of what costs claimed (well certainly is with my workings prepared in excel)

Accordingly there will not be a distinct accruals/prepayments schedule as there would be when preparing double entry accounts, there will merely be all costs listed that were claimed, with some notes re when paid/apportionment calculations etc.

In such a scenario it would be a pretty pig headed accountant who wasted further time (possibly unpaid) extracting the information from the working sheets, surely simpler to just hand over total sheets rather than do more work extracting the figures.

The only enduring rental schedule I prepare, which is designed as a carry forward schedule, is the asset cost schedule maintained for future CGT and interest relief purposes.

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Replying to DJKL:
Stepurhan
By stepurhan
01st Dec 2016 11:55

DJKL wrote:
In such a scenario it would be a pretty pig headed accountant who wasted further time (possibly unpaid) extracting the information from the working sheets, surely simpler to just hand over total sheets rather than do more work extracting the figures.

Fair comment. In that scenario simply handing over copies the working papers would be the simplest answer all round.

That said, if the outgoing accountant wanted to be petty (and I've dealt with a number of petty outgoing accountants) then they could just extract the accruals/prepayments information. The question is what the previous accountant HAS to give, not what it would be sensible for them to send.

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By chicka
01st Dec 2016 15:10

Thanks for all answers - it was really to do with the adjustments they had made on the 14/15 return as to then what I needed to include on 15/16 due to cut-off.
I have now managed to get that info from them (although not the full working papers) - what I have is sufficient.
Thanks again.

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By MBK
07th Dec 2016 14:20

Just picked this up again.

The legal position as regards working papers is that the default position is that, if the client has paid the accountant to bring the WP's into existence, then they are the property of the client. UNLESS the accountant's terms of engagement include an agreement to the contrary.

I know this because of a legal argument I got into with an IP - and lost. An expensive lesson but, unlike some of the other posters on here, I at least know the answer. And guess what our engagement letters now say?

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Replying to MBK:
By Tim Vane
07th Dec 2016 14:43

In order for the working papers to be the property of the client, the client must have asked for them to be produced. Clients rarely request this, in my experience, most being solely concerned with the final accounts and the tax return. In which case they have no right to the draft copies, schedules, wp etc. See Chantrey Martin & Co v Martin. But I concur that it is best to cover this in the LOE.

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