Enquiry case. Client has a good salary, but little asset backing. A possible outcome is that HMRC could bankrupt him.
He's paying £100 a month by standing order, which until now was enough to stop arrears growing.
Now the enquiry has reached a new phase and work over next three months may be in the order of £2k.
Two or three polite requests for a lump sum payment have fallen on deaf ears.
What next?
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Two or three polite requests have fallen on deaf ears.
You can only be polite for so long before you have to be firm.
Considering the clients circumstances, not getting paid now could result in you getting nothing later. Are you willing to run the risk of working for free? I know I wouldn’t.
Advise the client that you won't be doing any further work until you are paid.
He's taking the pee. You've asked. He's ignored. It's not a disproportionate response.
You're running a business not a charity.
.
Explain why it is in their interests to pay you to deal with HMRC and not pay another supplier instead.
It may be a sensible strategy to not pay you from their point of view (especially if you are soft on credit), it may not.
I would go in with something along the lines of:
"Your account is X in arears and is currently 'on stop'. By paying £100 a month we will be able to recommence work by ZZZZ, this may lead to HMRC ABCDEF, therefore we suggest you pay Z to bring your account up to date so we can recommence work on your account, and change the monthly sum to XX, this should avoid GGGG with HMRC"
I would do that on the phone, backed with a fairly formal email.
Can you blame him?
If the client is paying out £100 per month just now with the expectation of a further £2k bill and the possibility of bankruptcy anyway, you can see why he would not be falling over himself to fill in the S/O form.
If you believe there is a reasonable chance of a favourable settlement, then I would proceed with the advice above, highlighting the importance of you being able to aggressively go to bat for him.
If on the other hand, any sort of settlement with HMRC will be outwith his ability to pay, there is no point continuing.
You may also like to check on what your own institute says on the matter - they can have some unusual views on ceasing work when not being paid if it will disadvantage the client.
i take a different view from almost everbody above
sometimes invest a little time in your client is rewarding
Weekly not Monthly
We have a similar case started in June 2015. He had been on enquiry since March 2014 and previous accountant done nothing.
Started him on a weekly direct debit of £150 per week immediately and advised that 1 bounced D/D bounced was the house limit and if he bounced 2 we would resign, immediately bill him for work to date and bankrupt him if he did not pay. He has never missed a single payment.
The advantage of weekly over monthly is if one bounces you are not 2 months further down the line with increased WIP. Do weekly Standing Order if you cant do D/D's.
Just had look at ledger got payments in advance of £2550 against WIP of £3100. Case now agreed awaiting HMRC paperwork so by time all sorted he will be fully paid. Happy Days.
Some good thoughts here a couple from me - try go cardless for direct debits works well and always tell it how it is. Weekly direct debits work for me also.
This is why monthly SO are pants.
Any extras can't be charged (or you are disinclined to ask client).
And putting fees up for inflation is painful too. Charging £1,020 and requesting lump sum payment is easier if you charged £1,000 last year. But asking for the SO to go from £100 to £102 is awkward!