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.
- Company Dividends Received 76 2
- Is Corp tax payable on legacy received by bowls Club? 122 1
- Late Filing SA due to property income, individual was also a non dom for 15 years 103 8
- Client information from previous accountant 402 8
- Professional Qualification 181 1
- Closing down - who should buy whom? 547 29
- Question regarding A1 Form 162 1
- VAT margin scheme 78 7
- Maternity allowance 39 1
- Freehold Property Depreciation 44 1
- We contribute a percentage of employees' salaries to a pension scheme set up by them - do we need to get involved in auto-enrolment? 76 2
- Auto-enrolment drivel 686 11
- Tax and NI on payment to overseas employee 209 4
- Shares paid - petty cash 91 3
- Two questions re client meetings and TR Fees 518 9
- SA302s - Lenders to accept non hmrc copies 893 16
- cold file reviewer needed 266 2
- Property jointly owned by non married joint owners 83 1
- Auto Enrolment costs by payroll outsourcer 450 3
- Subcontracting accountancy work 250 3
- Possible Partnership? 526
- Lunatics in charge of the asylum - Bluestone 510
- Tax and accounting treatment on long lease granted from freehold 472
- New Fangled Penalties 322
- Clubs and Taxable Income 271
- Deferring taxable income until after 5 April 267
- Purchase of property freehold - capitalisation of costs 262
- Loans to other companies 206
- Closed PAYE schemes and auto enrolment 180
- English Company Owning Property in Scotland 173