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A local accountant gone into liquidation

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A local ACCA accountant that I worked previously has went into liquidation.  I now practice on my own, so a few of the clients would like me to do their returns etc as they have not been done for this year.  There is no one at the office now but I wondered if there was a procedure to be able to get clients books and previous papers.  The liquidator got in touch with the staff and told them to clear their desks but not to tell clients as they had not formally been appointed, is this normal?

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By lionofludesch
17th Jan 2019 09:02

Difficult situation but I think you have to wait for the liquidator to be appointed.

In truth, you'd be pushed to get any 2018 accounts in within 2 weeks. I'd probably submit estimated returns. You've a decent enough excuse.

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By memyself-eye
17th Jan 2019 09:24

Agreed - sign them up, send estimated returns:

Brownie points for you all round!

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By andy.partridge
17th Jan 2019 09:41

Has anyone alerted their alternate?

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Replying to andy.partridge:
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By lionofludesch
17th Jan 2019 13:09

andy.partridge wrote:

Has anyone alerted their alternate?

[chuckle]

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By andy.partridge
17th Jan 2019 21:45

Wicked.

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By Tim Vane
17th Jan 2019 09:42

I wouldn’t bust a gut. Their accountant going into liquidation in Jan would count as reasonable excuse, but if you sign them up and rush to file you could muck something up. Take a breath and take it easy then take the credit when you get their filing penalties cancelled.

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Lisa Thomas
By Insolvency Practitioner
17th Jan 2019 10:45

The Directors remain in control over the Company unless and until the Lqr is appointed.

Probably best to wait until they take control so you can liaise with them about the client records.

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By fawltybasil2575
17th Jan 2019 21:29

@ Willow0405 (OP).

If (and only if) you have been specifically requested to act for some of the clients of the accountancy company, then you should send your standard letters to the Directors of the company (asking them whether there are any circumstances which they wish to draw to your attention to enable you to consider whether to act; and asking them for “handover” information if there are no such circumstances). I suggest that a “PS” be added to that letter along the lines of:-

“If, as I understand may be the case, your company has appointed liquidators, then please (i) forward this letter to those liquidators and (ii) advise me of the name and address of those liquidators”.

In view of the recent (or imminent) appointment of liquidators, you should be especially careful not to transgress either (i) legal requirements and/or (ii) the requirements of your own governing body (especially since transgression could result in the liquidators taking legal action against you and/or making a formal complaint to your governing body – I would indeed recommend your consulting your governing body for their advices now, in any event).

The above is especially important since a key role of the liquidators is protecting the assets of the company (the “goodwill” inherent in the company’s client base being a potentially crucial asset).

As other more eminent members above have stated, the demise of the accountancy company should provide valid grounds for appealing any Penalties for late submission of Tax Returns (I would certainly not recommend the hasty submission of Tax Returns on or before 31 January 2019, since you will need to display extra caution in carrying out new client procedures before undertaking material work, even in the seemingly unlikely event that you receive an immediate response to the standard letter to the accountancy company as referred to above).

In short, proceed with especial caution, whilst at the same time seeking to enhance your own practice by the addition of new clients.

Basil.

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By Willow0405
17th Jan 2019 21:04

Thank you all so much for your advice and comments.

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By Andy Reeves
22nd Jan 2019 12:14

I don't see why you cannot act for these clients of your old employer immediately, as it sounds as though you left some time before the liquidation. Indeed, surely it is in the (prospective) clients' interests for you to take them on and do what you can to help.

I agree that you almost certainly get access to the old accountant's records, but then we all have incoming clients where the previous advisor gave us nothing to work on. I agree that it will be almost impossible to meet the 31 January deadline, but "reasonable excuse" should come into play with HMRC, but perhaps not Companies House.

By all means send the clearance letters, but I would send them recorded delivery and advise that unless you hear back within a very short period (7 days?), where there is an imminent deadline, you will assume that there is no objection.

The position of the liquidator protecting the goodwill of the demised firm is not your problem, and the clients are free to move where they want.

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