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A client signed his accounts but not the tax return

A client signed his accounts but not the tax...

A tax return of a self-employed person (not company) filed by the accountant on the basis of accounts signed by the client. After that accountant could not get sign on the tax return from the same client, as there was no an opportunity to have meeting with the client. After three years now client says that it is the responsibility of the accountant of filing wrong tax return as he did not sign the tax return (whereas he did sign the accounts). Please explain the position of accountant now as he got signed authority, fixed fee agreement and accounts but did not get sign of client on the tax return due to the reason I mentioned earlier.

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03rd Mar 2016 11:30

Are you by any chance the accountant in question, or are you asking on behalf of a friend or colleague?

What is is that the client alleges was wrong with the return submitted? 

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03rd Mar 2016 11:41

I wouldn’t file a tax return where I only had authority for the accounts. There’s a couple of reasons that spring to mind.

Taxable profits often differ from accounting profits. So what is shown in the accounts more than likely won’t be what is on the tax return.

There might be other sources of income that need to be recorded on the SATR. If the client hasn’t authorised the tax return, I couldn’t be certain that I have included all sources of taxable income.

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By DMGbus
03rd Mar 2016 11:48

Approval vs signing

What is really important is "was approval obtained from the client to file the tax return in question?". [ie. not just the accounts].

A photocopy or scanned copy of a signature on a paper return is good, but there are other alternatives such as electronic signature, FAX or eMail.

 

 

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03rd Mar 2016 12:12

The basic rule is that

the agent must have evidence that the client approved the return for submission.  This can be included in an email.  If it is I recommend putting the very long unique reference number for that return in the subject heading of the email.  Client replies to the email confirming OK to submit and identifies the exact return that is submitted.

If there is no evidence for the return submission, then 'the accountant' is very much on the back foot if the client disputes the entries.

I presume from the question that the accounts are correct, but the tax return isn't. Were both accounts and tax return sent at the same time?  If they were, the client's argument is rather weakened.  As this was three years ago I am curious as to what happened in later years,  Was the same omission/error perpetuated?  Was it spotted and done correctly in the next year, if so why wasn't an amended SATR submitted?

 

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03rd Mar 2016 12:18

Unless

Vaughan Blake1 wrote:

If there is no evidence for the return submission, then 'the accountant' is very much on the back foot if the client disputes the entries.

Unless all the client is disputing is the entries on the tax return that come out of the accounts that he has approved and signed, in which case it is the client and not the accountant who is on the back foot.

So - as I keep saying - it is crucial to know what the client is alleging. 

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03rd Mar 2016 12:13

I agree with the above responses about what one should do before submitting a client's return.

But this question is not about that as the return has already been submitted.

This question is about picking up the pieces after the event, where it is crucial to know what the client is actually alleging.

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By Ruddles
03rd Mar 2016 12:22

I'm with John

Before anyone can offer a meaningful comment we need to know what is allegedly wrong with the return. There's no point in guessing which way the horse went after it bolted out of the stable.

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03rd Mar 2016 12:30

I agree with John

The strict answer to the OP is therefore simply, 'in the doodoo'!

How deep depends on the answers to my questions and whether the client has become 'ex' or not. However, given that any tax now due would have been due anyway, interest is not a lot, (probably less than on an overdraft) and any penalties should be suspended,  it should be possible to extract himself from the doodoo and settle this fairly amicably.

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