Errors from former practice in VAT
A new small retail client has recently transferred their Accounting to my firm.
The reasons were due to:
1. A lack of support
2. the previous accountancy firm issued a schedule showing variances between Sales data provided by the client and actual sales.
The reasons for the variance was two fold:
1. All sales were not included on client's Revenue schedule
2. A fundamental error by previous accountants resulted in erroneous reporting of Sales, Output VAT and Input VAT
Clearly point 2 is an error of the accountancy firm. Point 1 is also, as they failed to check the Revenue reported by client to the bank statement which were made available in electronic format. If they had done this, they would have been able to advise the client the nature of the problem, rather than give client a schedule asking client to resolve. Also the problem goes back nearly 2 years at least.
My dilemma is the client can not pay the resulting VAT underpaid as the discrepancies cannot simply be absorbed due to the client's cash flow.
Should I raise this with previous accountants and will their indemnity insurance protect the client and stump up for previously unpaid VAT.
Also small loss last year may need to be restated.
Your thoughts would be most appreciated.
- Sole Trader to Ltd 92 1
- PAYE coding notice - deliberate misstatement 423 13
- Ex Client from over 3 years ago 612 8
- VT accounts licence key 365 6
- Starting up in practice - safety net 418 9
- How quickly do you turn around y/e accounts? 490 10
- Opening balances Sage 50 46 1
- Flat rate vat 328 4
- RTI Annual Scheme Query 236 6
- Rental property company 182 2
- Can Excel sheets be imported into Digita Accounts Production Posting Sheets? 177 2
- What password safe app does anyone recommend? 1,476 27
- Small employers paying people when sick thanks alot! 3,207 35
- Director's current account - fuel costs and expenses 412 11
- How to avoid PAYE Registeration 320 4
- Payroo Employer allowance query 290 8
- Enforcing A CCJ 411 7
- RTI 'Late Filing' & paying employees in arrears 240 1
- Reporting no P11d due when PAYE scheme closed by HMRC 5Apr2013 220 2
- Comapny valuation qualifications 169 2
- Residential Property Purchase Above £750K 832
- Using Sage with Sofa Categories 576
- Does anyone have an unwanted ICAEW wooden plaque? 449
- Goods shipped inter EU and VAT Reporting 323
- Free Tax Legislation? 302
- Director Loan account operation 284
- Non-Resident Director - UK Tax Position? 270
- transferring simply accounting 2010 from xp to windows 7 262
- Sage 200 and Access Dimensions reviews 244
- Paye procedures for CVA 184