Claimed for Negligence - Ceased Trading

Claimed for Negligence - Ceased Trading

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Hello Everyone. 

My past accountancy firm (Limited company - former member of the ICAEW - gave me so much bad advice that nearly 2 years after I am finding myself with a massive VAT bill from HMRC. The accountancy was negligent and failed any decent duty of care they had. This was just short of less than 2 years ago. 

Less than 2 years ago, they ceased trading to the public and they passed on their clients to a newly formed company. Same staff, different director. They were just as bad and kept on giving  me the worst advice. 

Since the initial problem was with the first company, I would probably be more likely to find the rightful compensation against them. 

Article 2. of Cessation of Practive of the ICAEW states that :

When a firm ceases the members in practice in that firm at the date of cessation shall ensure that there is in place appropriate cover to meet requirements of regulation 2.7 for at least 24 months following the cessation of the practice - See more at: http://www.icaew.com/en/members/regulations-standards-and-guidance/pract...

But how do I make a claim again them and if it not possible to get in touch with the Director or they will not respond?  Do I need to make a claim directly to the Insurer?

I contacted both the ICAEW (whose customer service could not have cared less about my request)  and the FCA. Neither can help. 

Thanks for any hint.

Replies (13)

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By User deleted
17th Aug 2015 20:28

Have you considered speaking to a solicitor? That's what I'd do if I was considering making a legal claim against someone.

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David Winch
By David Winch
17th Aug 2015 23:07

Independent legal advice

You need to obtain independent legal advice from a solicitor or barrister.

Even if you obtained bad advice from your former accountants & you now have an unexpected VAT bill it does not necessarily follow that you will have a successful negligence claim against your former accountants.

You need to show that under your contract with them they were obliged to give your proper advice, & they failed to do that, & you relied on them & as a result you now have a larger liability to HMRC than you would have had if they had given your proper advice.

Get proper (paid for) advice from a lawyer.

David

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By johngroganjga
18th Aug 2015 08:32

I agree with the above,  The

I agree with the above,  The fact that your VAT bill is "massive" does not mean, of itself. that you have a basis for a claim against your former accountants.  If it's just a matter of that VAT liability you will need to to show that the accountants had a duty to advise you on the matter in question, that they failed in that duty, and that the VAT liability is higher than it would have been if they had not failed.

You will need to take this to a solicitor experienced in professional negligence actions and take his or her advice on whether you have a good claim in law and if so how to go about bringing it, and the cost implications of doing so. The solicitor will know how to go about identifying who to bring the claim against.

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By Anthony123
18th Aug 2015 09:38

as regards cessation

Practitioners are supposed to retain their PI cover for up to 6 years or so after they cease in the event of a negligence claim.

However as stated above you need to be able to show that your accountant had a duty of care, breached that duty and as a result you suffered a financial loss you did not have otherwise. Take their advice to find a lawyer who specialises in professional negligence claims. Alternatively as a first step consult another accountant (perhaps one who specialises in advising on negligence) and ask them if you appear to have a case.

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By bernard michael
18th Aug 2015 09:43

Does the original company still exist or has it been liquidated/dissolved ?

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Replying to EdFromCambridge:
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By zepland
18th Aug 2015 23:31

the orginal company still exists - meaning that it has not been liquidated according to Company House. 

although, it stopped trading with the public a couple years ago. 

 

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By emcnicholas
18th Aug 2015 10:38

Claim of Negligent Advice and VAT Liability
There are a lot of issues here. You proving legal cause and tax effect is what a specalist solicitor is for.

Eamon Mc Nicholas

Tax Barrister

www.EamonMcNicholas.com

[Liability is excluded. The above is not to be taken nor used as specific advice.]

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By davidbrewster
19th Aug 2015 11:52

ACCOUNTANCY NEGLIGENCE

"After the Event" Legal Expenses may be the way forward.

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7om
By Tom 7000
19th Aug 2015 12:22

2 queries

First query

 

Your vat bill is your vat bill. You have to pay it. If the accountant told you to do something that created the bill when if you had done it another way and there would be no vat, then you may have a case. It depends how the vat arose, perhaps put some details on here and you might get a  ( without liability) opinion or 2. Assuming that it seems like a fair claim, then you need a lawyer to sue him. £300/hr and you are probably looking at 50 hours work maybe possibly double or treble. The costs ( or some of them)  may be reclaimed from the accountant, I believe...check with the lawyer. Lawyers are expensive....

 

The one above.You need to write to them as duly appointed agent and ask them what they want, so you have something in writing to cover your [***].  If the returns due, you might as well do it so you have the figures, surely they will want it sooner or later, whats your opinion?

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By lme
19th Aug 2015 13:03

Sorry the ICAEW were not helpful

I had to phone the Law Sociey once with a concern about a solicitor, and they were very helpful and supportive. Sorry to hear the ICAEW wasn't in this case - its in their members' and the public interests that they are helpful in such cases.

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