Rules surrounding invoicing clients

Rules surrounding invoicing clients

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Does anyone know the rules surrounding invoicing clients please? I've had an unexpected invoice from the accountant and there was never any agreement or discussion of fees, my accountants asked me for my records to answer queries regarding the accounts and tax return. I have since got my file from them and no longer am using them.
Thanks

Replies (31)

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By johngroganjga
09th Dec 2014 18:06

There are no rules. It's just the law of contract, documented in the accountant's letter of engagement.

What was unexpected about the invoice you have received?

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Replying to JCresswellTax:
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By Snuggle
09th Dec 2014 18:16

There was no letter of engagement.

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By andy.partridge
09th Dec 2014 18:21

Let's have some more information - on 2nd thoughts . . .

1. They did some work for you

2. They invoiced you

Is the above correct?

If so, are you thinking that on the basis of a technicality you don't need to pay them?

Edit - Is this a repeat of your previous question from last month where you engaged the firm to help you with a tax investigation?

There were 48 comments on it. How many more would you like?

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By Snuggle
09th Dec 2014 18:21

I disagree with the random bill and the amount. They should've told me on the outset that there would be a fee and how it would be calculated

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By Snuggle
09th Dec 2014 18:23

Can they make me pay legally is what I'm asking?

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By mrme89
09th Dec 2014 18:27

It depends - you still haven't said what the invoice is for and what is in your Letter of Engagement.

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By Snuggle
09th Dec 2014 18:33

There is no letter of engagement. The invoice Is for time spent answering tax inspectors enquiry

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By mrme89
09th Dec 2014 18:40

Did the accountant actually undertake this work?

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By Snuggle
09th Dec 2014 18:46

They have done some work and I am willing to pay some money, but why do they think they can just bill me for the amount that they have, and without even telling me about it first? I'm annoyed that they have the audacity to not even tell me about the fee at the start and then send an invoice, and the matter is ongoing and I've taken my files from them as I don't like the way that they have approached this.

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By mrme89
09th Dec 2014 18:55

They should have made the fee clear up front. However, if you asked them to do the work, but didn't ask about the fee, you are partly to blame for the position you are in.

You can hardly describe the invoice as unexpected.

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By Snuggle
09th Dec 2014 18:58

I didn't ask them to do anything, they asked for my paperwork and I gave it to them.

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Replying to welsn3:
Stepurhan
By stepurhan
10th Dec 2014 09:01

Take some responsibility

Snuggle wrote:
I didn't ask them to do anything, they asked for my paperwork and I gave it to them.
You didn't ask them to do anything, yet you gave them records, so that cannot possibly be true. You engaged them to do some work, but you never asked how much that work would cost.

Take some responsibility for your own actions. You asked someone to do some work, and they expect to get paid for that work. Trying to weasel out of on some legal technicality is reprehensible behaviour, though I doubt it will be possible. If you genuinely think the fee is excessive, then negotiate. Carry on like this and you are likely to find yourself paying this bill and legal fees on top. What's more, you may find it astonishingly difficult to get an accountant to take you on in the future once they've had a little chat with your current one about your attitude. 

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By mrme89
09th Dec 2014 19:02

Why give them paperwork if you didn't want them to do anything with it?

I suspect the accountant is in a stronger position than you, and will probably pursue the debt - unless you reach some sort of agreement.

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By Jekyll and Hyde
09th Dec 2014 19:03

Did you agree to them acting as your agent during the enqurn?
I partly understand your issue, although I do not agree, and I sense that the accountant would want to be paid for the work they have undertaken.

I feel that the accountant may not have met with you at the outset of the enquiry and explained what is involved with dealing with ano enquiry. Perhaps in hindsight they could have agreed a an hourly rate/ agreed level of fees to work to. But even here it is impossible to satisfy every client as if I were to afree a limit of say £500 and not undertake any more work after that fee, who would complete the enquiry? so the accountant cannot win, it's mainly about the relationship between client and accountant.

out of interest what was the value of the invoice for the work done?

having said the above, I feel that I get similarly annoyed about my utilities as I am never told how much my bill will be at the start of each month.

As for a tax enquiry, how long do you anticipate the accountant spent dealing with this? Do you understand what happens when a tax payer gets enquired into? has HMRC done enough to lower the expectation gap between costs associated to preparing tax returns/tax enquiries and the money they raise in penalties?

ultimately, could you have dealt with the enquiry yourself and what was your expectations on time and costs of this tax enquiry.

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By Snuggle
09th Dec 2014 19:04

Is it okay to send invoices for whatever amounts with no agreement?

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By mrme89
09th Dec 2014 19:07

Yes, it is ok to issue invoices on that basis. Whether you will get paid is a different matter.

You seem to be looking for a get out of jail free card. The accountant did the work so either settle the invoice or try and negotiate the amount.

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By Snuggle
09th Dec 2014 19:08

With the utilities analogy you at least know that you are going to be billed

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By User deleted
09th Dec 2014 19:26

Charity?

Is your accountant running a charity? If so then I'm surprised they billed you. If however, as I suspect, they're actually running a business, then naturally they'd charge you for the work they did. After all, if you told a plumber you had a big leak that you wanted them to sort out, and they asked for access to sort it which you granted, wouldn't you be expecting a bill afterwards when you no longer had a leak? 

(I had a plumber in last week to fix my radiator & didn't agree a price first - I think when he sends me the invoice I'll turn round and say that we didn't have a letter of engagement or an agreed price so I'm not paying. I'm sure he'll turn around and say 'that's fine Flash, have it on the house')

They did the work, you didn't think to agree a price. Pay them and pretend that you have some morals hidden away somewhere. Stop trying to weasel your way out of it. 

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Replying to lionofludesch:
Red Leader
By Red Leader
09th Dec 2014 19:31

Category D

Is there a correlation between Category D and posting questions here? I think there might be.

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By Jekyll and Hyde
09th Dec 2014 19:40

The bit I partly agree with the op on is....
.... whether the size of the bill compared to the cost of the preparation of accounts and tax return.

posted last month was a ffee of £2k for work to date on the enquiry. I would be interested to knwo what the accountants charged for the initial accounts and tax return and if it is consist for such a fee for tax return work.

For example every client gets a note of my hourly rates for types of work. bookkeeping £30 per hour to partner/tax time £85 per hour. to rack up £2k fee would be in excess of 20 hours work. so if a client of mine is a simple accounts/tax return and I charge them say £500 (an example). I would then expect that the tax enquiry would be simple.

However using my figures and turning it around. If I am usually charged £500 annually I would not expect a £2k fee.which is why I partly understand op query. I wonder what the size of the accountancy practice is and what the fees for the accounts were?

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Kieran Phelan
By KPEM online
09th Dec 2014 20:02

communication and expectations
Clearly the accountant should have communicated things better in terms of why the records were needed, what work would be done on the records, what purpose the work served (i.e. to handle tax enquiry and aim to minimise tax exposure, and more importantly an estimate of fees.

Without knowing all the facts, I am a little surprised that the OP says they should have been told they would be charged. Surely the OP knew or ought to have known that chargeable work was being undertaken? Those in business are often judged that they ought to know these things.

Whilst the communication from the accountant could have been better, the OP must accept some of the fault for not clarifying before handing over the info. You wouldnt leave your car to the mechanic just because he asked for it without asking why they need it or what they are doing to your car and at what cost?

I had a client who once refused to pay for HMRC enquiry work on the basis that i agreed to "help" them with it. They actually argued help equals "for free". Only wish i was kidding. After some legals they paid up. I suspect the OP could find themselves in similar predicament.

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Out of my mind
By runningmate
09th Dec 2014 20:09

Just saying

Perhaps the OP should be giving some thought to what questions were HMRC asking, what were the responses to those questions, are his / her tax returns still regarded as accurate, if not how much tax, interest & penalties will be payable to HMRC to square this away?

RM

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By Snuggle
09th Dec 2014 20:27

i asked if they can make me pay the invoice for the amount they've stated that's all. On what legal grounds? There is no agreement. I think a lawyer friend will help in this, thanks for your help.

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Replying to vtsoftware:
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By Maslins
10th Dec 2014 09:42

Wow

Snuggle wrote:
i asked if they can make me pay the invoice for the amount they've stated that's all. On what legal grounds? There is no agreement. I think a lawyer friend will help in this, thanks for your help.

Wow...I hope your lawyer friend tells you to grow up and pay the invoice.  I also hope they invoice you for providing that legal advice.

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By mrme89
09th Dec 2014 20:44

On what legal grounds?
Implied contract - you gave them your records to proceed with the work.

Hope the lawyer friend is running a charity, otherwise you might be charged for his time.

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Out of my mind
By runningmate
09th Dec 2014 20:57

Agreement

You have said there is no letter of engagement, so it would appear there is no written agreement between yourself & your (former) accountant.  But clearly there is an unwritten agreement (referred to as a contract) & that will be legally binding.

The court will infer that the unwritten contract includes an agreement that the accountant should do the work which you ask him to do (& should do it reasonably well) & should be paid a reasonable fee for that work.  That will be reinforced by the earlier behaviour of you both (in other words this is exactly how both of you have behaved previously).

It appears that you asked him to deal with HMRC as your tax agent.  That would normally cover submitting your tax return to HMRC & responding to any correspondence from them concerning your tax affairs.

You seem to have provided documents to the accountant specifically for him to do that.

So the courts will hold that he should be paid a reasonable fee for that work which he has done.

Most likely the accountant will say that his bill is a reasonable fee for the work he has done.

You on the other hand apparently feel either that this work should be covered by the fees you have previously paid or that the bill is unreasonably high.

If it goes that far the courts will come to a decision on that dispute & decide how much (if anything) you should pay.

That's what the lawyer will tell you.

RM

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By The Innkeeper
10th Dec 2014 08:51

& if

you think the accountancy fee is large just you wait until you see the lawyers fee

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Locutus of Borg
By Locutus
10th Dec 2014 10:06

Not a leg to stand on
Snuggle, the most you can do here is try talk to your former accountant and negotiate with them about the size of the fee.

If the matter does to court, you will lose, as you knew your former accountant charged for their services, yet you gave them papers to deal with an additional matter that was outside the scope of the routine work that they did for you.

It is an unfortunate fact of life that tax enquiries (if this is what the invoice is for) are usually time consuming things to deal with. Accountants find it difficult to give fixed fee quotes for them, as it is difficult to know how long they will last.

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paddle steamer
By DJKL
10th Dec 2014 10:39

I think the posters here are being unfair........

I think the posters here are being unfair to our  colleagues in the legal profession. By encouraging the client to negotiate the exit fee with his former accountant they are possibly depriving the families of the legal fraternity of Christmas presents, large turkeys and a Merry Christmas, does goodwill to all men not extend to solicitors?

Potentially the rewards here could be two firms of solicitors arguing the implied contract terms, possibly other accountants earning fees as experts passing comment on the work done by the first accountant and a supporting cast of others, not forgetting possible spin off into solicitors acting for PI insurer of original accountant. A veritable gravy train.

Alternatively, in an act of seasonal charity to the OP, I can pass him the oft quoted phrase of my late Father, a solicitor "Never litigate" and if the OP considers the DIY route with this matter my Father's familiar toast, "God bless the man who writes his own will." should echo around his head as to its implications.

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By Snuggle
10th Dec 2014 11:08

Yeah the Icaew code of ethics is an interesting read especially about fees!

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By The Innkeeper
10th Dec 2014 11:31

it seems to

me that this is pure and simply a fee dispute. The ICAEW have a fee arbitration scheme why not use that.

&

Like in all these posts there are two sides to every story AND the truth

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