Professional Clearance when fees outstanding...
We have received a professional clearance letter regarding a client who hasn't bothered to pay us, and even when we offered very good terms (let him pay a bill in arrears in 6 installments by direct debit), the last 3 months bounced.
We made it clear to the client that we wouldn't be doing any more work for him until outstanding invoices paid. There is no dispute as to the invoice, just the client says he doesn't have money to pay, and "why do you bother trying to collect the direct debit when it's going to bounce".
Anyway, client left (good riddance) and found another accountant, who is now asking for professional clearance and the usual (sets of accounts, debtors and creditors, TB, tax computations etc). I know that the client is extremely unlikely to pay what he owes if I give away the accounts etc.
How should I reply to the request for clearance? Whilst I want to get rid of this headache, I don't want to put any more work unpaid when I haven't been paid for the original work. What am I required to pass over, and what can I/shoudl I reply?
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