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Best way to respond to a Letter of Clearance

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Hi All,

Please let me know what you would do with regards to this.

Client decided that he longer needed my services last January - no big deal; was rather a bit of relief, as I found him pretty high maintenance - sure you all know what I mean.

Unfortunately, he owes me for a fair bit of work - £300 for calculating, completing and submitting his SA100. Debt outstanding for about 150 days.

Also, his company (he's an owner/director) owes me £200. Debt outstanding for about 120 days

I have sent him a number of emails, and received little to no response. He has however, paid £100 'out-of-the-blue' in March (debt was £300).

He has now instructed a new accountant to work/act for him, and as such, I have now received a Letter of Clearance.

Of course, until he clears his outstanding fees, I am going to refuse to release any information. I have no primary documents to return.

My question (sorry to take so long) is:

How do I tell the accountant that I am unwilling to release this info until the ex-client's account is cleared?

Also, should these outstanding debts be specifically brought to the accountants attention?

Your ideas/comments will be much appreciated.

Thanks in advance.

Replies (17)

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By johngroganjga
19th May 2017 19:55

"Clearance" and providing information are two separate things. Assuming you have client's permission to correspond at all, what you do is (a) confirm that there are no professional or other matters you need to make your successor aware of (assuming that that is the case), and (b) state that you will be happy to provide copies of the documents requested as soon as your outstanding fees are paid.

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Replying to johngroganjga:
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By CardiffAccountant
19th May 2017 20:38

Thanks John.

Always seems so obvious when someone else adds their thoughts.

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blue sheep
By Nigel Henshaw
20th May 2017 06:47

I would not hesitate to mention that the fees have been outstanding for some time, if nothing else it is a professional courtesy to let them know the type of client they are dealing with, plus you never know it might prompt the client to pay

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By Ruddles
20th May 2017 09:22

I would never mention the issue of fees with a new agent, save to say that information will be provided when all outstanding items settled. To go any further might persuade the agent not to engage, and prejudice the client's interests, when the client may well have a good reason (valid or not) for not having paid. You might argue that you are only stating facts, but one can always read between the lines.

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Teignmouth
By Paul Scholes
20th May 2017 09:26

Agree with the above but don't hold your breath.

Money Claim Online is really effective and easy to use, give the client 7 days notice that you will commence a claim and that, if you do, it will add interest and court fees to the debts.

https://www.moneyclaim.gov.uk/web/mcol/welcome

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By CardiffAccountant
20th May 2017 15:49

Hi All,

Thanks for your thoughts regarding this.

Will start chasing my cash - AGAIN.

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By bernard michael
21st May 2017 10:50

If you can't be bothered to do it yourself Thomas Higgins are cheap, ruthless and very effective at getting money paid

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By ArsalanShah
22nd May 2017 10:40

Another vote for Thomas Higgins - I have used them for years (effective and will cost you less than you thought)

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By pauljohnston
23rd May 2017 12:21

Thomas Higgins gets my vote too http://www.thomashiggins.com/

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Replying to pauljohnston:
Red Leader
By Red Leader
23rd May 2017 14:08

Agreed!

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By David Gordon FCCA
30th May 2017 16:37

Oh really!
How long have you been in the profession?

Just send a two-line message.
"no more time is being spent on this matter except and unless outstanding fees are paid.
Accountant's lien is being exercised over documents held. Time involved in trasferring the client will be charged to you at £250 per hour".

You may not, however, exercise accountant's lien over tax documents and or correspondence.

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By David Gordon FCCA
30th May 2017 16:40

and another thing, I was taught that it is not safe to give clearance if a client is substantially overdue on fees.
The reason being that the client may well be insolvent by being unable to pay debts as they fall due.

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Replying to David Gordon FCCA:
By Ruddles
30th May 2017 16:50

Were you not also taught that there is no such thing as clearance?

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By David Gordon FCCA
30th May 2017 16:40

and another thing, I was taught that it is not safe to give clearance if a client is substantially overdue on fees.
The reason being that the client may well be insolvent by being unable to pay debts as they fall due.

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By CardiffAccountant
30th May 2017 16:59

Hi All,

Thanks for all your views and comments.

Client now paid half of outstanding fees, so half of the information released.

I've little doubt that the new accountant has worked out that the 'client' was late with paying the fees.

When all fees cleared, remaining information will be released.

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Replying to CardiffAccountant:
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By Cloudcounter
31st May 2017 13:26

CardiffAccountant wrote:

Client now paid half of outstanding fees, so half of the information released.

A detailed trial balance, cut vertically in half, with the left hand half sent now and the right hand to be sent when the balance is paid? :-)

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Replying to Cloudcounter:
blue sheep
By Nigel Henshaw
31st May 2017 13:35

LMAO, maybe you just sent the even pages of the Return, with the odd to follow....

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