Is this my problem?

Is this my problem?

Didn't find your answer?

Afternoon

So I've got a partnership client who I prepare the quarterly vat returns for, along with doing their minimal monthly invoicing to clients. I have all of their sales and purchase invoices. They tell me they have another accountant that deals with their partnership and self assessments, although I have always had all of the paperwork that the other accountant would have required. I'm not convinced that the partnership is even registered as I was originally going to do this on their behalf along with registration for self assessment but then they said they had it all sorted. When I have questioned them about this, I get shady answers saying it is all sorted elsewhere which I just don't believe and that they are under a Paye scheme elsewhere (which still wouldn't affect their personal SA or their partnership).

My LOE only covers the current works I do, but I feel sure they are dodgy - is this my problem? Or do I do the agreed works and leave them to it? Or ditch them all together? What would you do? I've checked the ML requirements I follow under my license but this doesn't appear relevant?

Unprejudiced responses appreciated, thanks in advance!

Replies (18)

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By Roland195
15th May 2015 14:27

Implausible

If you have all their records, and you don't supply them to any other advisor then it does raise questions over how someone is able to prepare accounts.

That said, they are obviously VAT registered so they are not exactly flying under HMRC's radar.

Are the VAT returns usually repayments?    

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By cheekychappy
15th May 2015 14:31

For the work you are engaged to do, I wouldn't be happy to continue act under the circumstances.

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By Tim Vane
15th May 2015 14:33

You say you prepare VAT returns. Do you submit them? 

Do you have evidence that they have ever paid over any VAT to HMRC? 

Have you verified their VAT number to ensure it is genuine?

What you seem to have right there is Suspicous Activity. Personally, I would report.

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By tinyme77
15th May 2015 15:47

Do they just not want to give you any more business and think that you are fishing for work?

Otherwise sounds dodgy but I don't think that you have any real evidence that they are doing anything wrong.

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By claudialowe
15th May 2015 15:53

Agree with Tim

that the key here is who physically submits the VAT returns.  If you do, then they are on HMRC radar.  If someone else does, then I would be very wary.

Just because a VAT number is genuine, it doesn't necessarily mean that it is theirs.

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Replying to Joanlin:
paddle steamer
By DJKL
15th May 2015 16:31

But, to look at it

claudialowe wrote:

that the key here is who physically submits the VAT returns.  If you do, then they are on HMRC radar.  If someone else does, then I would be very wary.

Just because a VAT number is genuine, it doesn't necessarily mean that it is theirs.

But, to look at it in a more positive light, if they are not submitting vat returns why are they bothering to pay someone to prepare them? If I was a rogue why would I bother with this step?

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By andy.partridge
15th May 2015 16:27

Your words

You get 'shady' answers, you 'feel sure they are dodgy'.

Although it's not an issue you have invited it is something you need to deal with.

If you believe that the returns can not be prepared correctly without your input ask the proprietors for the contact so that you can send them details/ask what they need. Usually an honest client might welcome the cooperation and communication. If your request meets with a refusal it is more likely that your suspicions are correct.

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By FAY7H
15th May 2015 16:59

Thanks
Thank you, I prepare and submit the returns on their behalf and they pay any amounts due. I just don't believe they have registered the partnership or pay any amounts under self assessment.

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Replying to Wanderer:
Quack
By Constantly Confused
15th May 2015 17:03

How peculiar!

FAY7H wrote:
Thank you, I prepare and submit the returns on their behalf and they pay any amounts due. I just don't believe they have registered the partnership or pay any amounts under self assessment.

As DJKL says, odd that they would be going to lengths to toe the VAT line but try and hide from the partnership side. 

I would exercise caution, but not sure what to say beyond that!  Surely if you are happy that the work you are doing is good and proper, what else the business is or isn't doing (AML aside) is not your issue.

Perhaps I'm being naive though!

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By petersaxton
15th May 2015 17:31

From what you know

It seems that it is impossible for the client to comply with their obligations if you are not doing it all. It must be suspicious activity.

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By mgandc
15th May 2015 18:39

Access to records

How are the VAT returns prepared by you, are they on your system or on the clients?

Is there a plausible explanation that they allow access to Sage/Xero/etc etc to the them and the other advisers just choose to not ask any questions or your record keeping is perfect?

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By FAY7H
15th May 2015 20:09

Prepared manually
Returns are prepared manually directly from the paperwork as I don't believe they carry out any bookkeeping.

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By Moonbeam
17th May 2015 10:33

Gut reaction

If I think someone is dodgy I won't take them on. If I sign up someone and need to question their attitude/business practices and they give me duff answers or no answers at all then I show them the door.

Your gut reaction is a marvellous tool. Ignore it at your peril.

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By andy.partridge
17th May 2015 11:02

Moonbeam is right

The only gap in the 'gut test' might be experience. Depending on one's own character if you are inexperienced you might see everyone as fabulous (naïve) or criminal (cynical).

You should have your own values and policies and project those to your clients. The clients might decide for themselves if they see themselves fitting it to the way you work.

Importantly, you need to exercise some control. If you act like a hired hand you will be treated like one, but it you are a confident, trusted business advisor the clients you wish to retain will respond appropriately.

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By Stuart.thomson
17th May 2015 20:12

I think before you ditch your client, you need to explain to them that although they are a partnership and file individual SA returns covering the partnership profits, there is still a need to submit some documents on behalf of the partnership. If your client is not forth coming then you cannot do your job properly and you need to question your ability to fulfil your role. At the every least someone is going to wonder what you did if it blows up (HMRC, client, institute?) - document your position very clearly for all.

If you are not satisfied with your answer then its a SAR and lost client. But a good conscience!

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paddle steamer
By DJKL
18th May 2015 09:42

Appears somewhat strange

It appears somewhat strange, can one register a partnership for vat when HMRC have not had the partnership registered for SA?

As the OP submits the vat returns  has he/she access to the client's HMRC online services account? If so, is there no clues to SA registration status?

I can envisage the other way round, registered for SA but not for vat, but to be registered for vat but not SA-how has the client achieved this feat?

 

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Replying to ireallyshouldknowthisbut:
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By andy.partridge
18th May 2015 10:08

Have seen it myself

DJKL wrote:

It appears somewhat strange, can one register a partnership for vat when HMRC have not had the partnership registered for SA?

 


Different circumstances in that paper registrations were made and presumably mislaid. A UTR was not issued. This only became a problem over a year later when it was time to file a tax return.There was never any attempt by HMRC to join up the dots on the VAT registration and returns were filed and paid as normal.
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By Roland195
18th May 2015 10:05

I agree

To register the partnership for VAT, the partners would have had to have provided their own details at this point. HMRC's systems and departments are not exactly renowned for their ability to communicate & share data however we probably are safe to assume that they would connect the dots on this sooner or later.

As we are not talking about VAT repayments here, it seems even less likely that your client has gone out of their way to comply (and pay) with one tax while seeking to evade another.

Could it not just be that they are late with the filing of accounts/tax returns? How long have you acted for them?

I am not sure why so many feel that you should cease the engagement - you are at least helping to ensure they meet their obligations for VAT (and it is not like this is to facilitate repayments) therefore I cannot see why any blame could attach to you for matters for which you are not engaged.

 

 

 

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