Client leaving without any notification

How do you deal with Disrespectful clients

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I have been working for this particularly client for six years. We had a good relationship until behind my back they worked with a R&D firm to claim a corporation tax refund which I think  they were not entitled to claim.   I was not aware until I saw they have large corporation tax refund paid.  Anyway, I knew at that point the relationship was finished though I just carried out as normal. 

A couple months back I noticed increase in personal expenses where they were claiming VAT back on which I disallowed.  I think this may have been a trigger for them to move

The EL says payment terms 1st of the month but they always paid around end of the month or later which I found frustrating

I knew they would leave at somepoint but little dismayed receiving a professional clearance from their new accountants today via email while the client was copied in. I am fine for clients leaving and don’t care why but at least have the courtesy to inform me beforehand.

I have gone out of way to help them in the past during the Pandemic and them buying a property for the first time plus lots of other stuff.  I always have responded to them immediately and think I have provided an exceptional service to them.  I am tempted to say something about the lack of respect  to this client.

Anyway, the rather old engagement says they have to one months’ notice in writing. Do I wait for them to send the notice before replying to their accountants?  They have already paid 9 months in advance for their accounts and corporation tax filing but the EL says no refunds.  Do I have to give them a refund based on the work not carried out ?

Replies (53)

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By Duggimon
19th Dec 2023 10:30

Clearly the relationship was always doomed because you're a careful and conscientious person who cares about doing their best and providing a good service while they are a bit of a d*ck.

A mismatch like that can't be rectified by you doing any better, indeed perhaps it would have worked out if you were less good as an accountant and careless with your filing, rushing around at the last minute and generally providing the service they know they deserve.

Were I you I'd send the usual bland "no professional reason..." complete the handover, bill the time generously, refund anything left in their prepayment and then disengage and file an SAR, then think no more about it.

I suppose you could go whole hog and include your suspicions of tax evasion in your response to the professional clearance but while the SAR is protected and required under AML legislation, there's potential for a letter to be libellous so I think the burden of proof before you say anything in that is higher.

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Replying to Duggimon:
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By JimLittle
19th Dec 2023 11:03

Thank you. I am reluctant to provide any form of refund. If they had had the courtesy of notifying me then fair enough and would have gladly provided a refund. The worse thing about this is that we cannot even make our point clear how rude and disrespectful it is to receive a surprise professional clearance letter (PC). I was even chatting to the director of the company a couple of hours earlier then I received the PC letter. Not sure why they never notified me then.

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Replying to JimLittle:
By Duggimon
19th Dec 2023 15:43

For your own sake you need to focus on what you can do and are able to affect rather than wonder or agonise over that which you could never influence. The behaviour of others is not something you can do anything meaningful to change, in your position I would be focusing on extricating myself with the minimum of fuss and getting as quickly as possible to a place where I don't need to think about it any more.

Hence my suggestion to take what's rightly yours form the prepayment and, while you are within your rights per your Ts & Cs to keep the lot, I'd consider repaying the rest just for a smooth exit from what was a nasty situation.

That you only just found out it was a nasty situation doesn't change the fact that you're better off now having found that out.

Try to avoid getting embroiled in the nastier side of things with anyone for whom this mode of operation is standard practice, they'll drag you down to their level and beat you with experience. The best possible outcome for you now is to retrieve what money you're owed and never think of them again, and the easiest path to that point is the best one to take.

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Replying to Duggimon:
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By JimLittle
19th Dec 2023 19:36

Yes you are perfectly correct . Its just difficult not to at least something about their conduct. I guess I have been ghosted

I think I will just provide the PC and transfer the software over to the client and be done with them

If they revert on the refund I will just refer them to the engagement letter which states "one month written notice" and "No Refunds. If they push then maybe will work something out.

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Replying to Duggimon:
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By Truthsayer
19th Dec 2023 12:44

'there's potential for a letter to be libellous'

A reply to a professional enquiry letter is protected by qualified privilege. The contents would have to be reckless or malicious to be actionable. Even if you say something bad that turns out to be wrong, it is not actionable if you had reason to think it to be true.

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By FactChecker
19th Dec 2023 12:51

Nevertheless there's nothing to be gained by leaving ammunition lying around that just might be used against you at a later date (even if without justification).
[One of first lessons I was taught as a very young child in a hostile environment].

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Stepurhan
By stepurhan
19th Dec 2023 10:34

If they haven't informed you they are moving, you cannot respond to the professional clearance letter other than to tell them you don't have permission to pass on data. (client confidentiality).

Do you have to give them a refund and do you have to make them give one month's notice are both legal questions, not accounting ones.

Might be best to say good riddance and take a pragmatic view though. You seem to be investing a lot of energy in a client leaving that, from your description, you don't particularly want to continue working with.

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Replying to stepurhan:
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By JimLittle
19th Dec 2023 11:13

Yes I was thinking of that do I need to respond to the PC Letter even though he was copied in the email sent by the new accountants ?

I will take some legal advice

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Replying to JimLittle:
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By Truthsayer
19th Dec 2023 12:58

I'm surprised you need to take legal advice over something that happens several times a year to a typical practitioner. You need your client's permission to reply in full to the professional enquiry letter and disclose any appropriate information. You MUST ask the client for this NOW. Don't wait for the client to contact you first. If they fail to supply that permission, you must tell that fact to the incoming accountant and give no further information.

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Replying to Truthsayer:
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By philaccountant
20th Dec 2023 10:35

At this time of year I wouldn't be making replying to this unforewarned letter my top priority. If the client thinks it's a matter of urgency, they can raise it with me themselves. Otherwise I would concentrate on the fee earning clients I still have.

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Replying to philaccountant:
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By JimLittle
20th Dec 2023 10:51

Yes my same thoughts too. I just returned from holiday and just catching up plus its Christmas and tax return season. It can wait but will respond in reasonable time.

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Replying to Truthsayer:
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By Southwestbeancounter
20th Dec 2023 14:22

Truthsayer wrote:

You MUST ask the client for this NOW. Don't wait for the client to contact you first. If they fail to supply that permission, you must tell that fact to the incoming accountant and give no further information.

Absolutely right Truthsayer!

I received a professional clearance letter out of the blue for a musician client once who I'd known for many years and who I got on with perfectly well. When I emailed him to effectively say sorry to see him go it transpired that he knew nothing about the letter - the confusion had arisen as the 'new accountant' was acting for a band of which my client was a member and obviously fancied taking on their private tax affairs too! Suffice to stay the client then remained with me for many years until he went off to pastures new via his employment but we are still in touch.

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stonks
By WinterDragon
19th Dec 2023 11:58

Oh boy an early Christmas present for you, you won't have to work with this client again.

Notwithstanding any requirements to speak to your MLRO and submit an SAR...
I'd just pick up the phone to the client, ask them to confirm if they're happy for you to respond to the clearance letter and get on with it.
What is there to gain from prolonging the situation, make sure you get your final invoice in and refund any prepayments left over.

NAL and can't advise whether you could refuse a refund but morally I'd rather feel I'd billed the client fairly for my work than say I kept their money out of spite and legal tomfoolery.

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RLI
By lionofludesch
19th Dec 2023 12:13

If the engagement letter says they're not entitled to a refund, you don't have to give them one.

But I would have. I wasn't here to take money for nothing.

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By Tom+Cross
19th Dec 2023 12:20

I'd be very careful not to cross the legislation relating to GDPR.

To avoid any issues, I would write to the agent who has corresponded with you and simply say that you do not have your client's further, written, instructions. Once the client (soon to be ex) has written to you, you will be able to reply.

Send the lady, or gentleman on their way and don't even mention any fees paid, or otherwise.

If you do decide on filing an SAR, under no circumstances mention this to the new kid on the block. I think that would breach the AMLR legislation and you could leave yourself open to some serious trouble.

Clients come. Clients go. Try not to take it personally and continue to live the dream. You have work. Plenty don't.

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Replying to Tom+Cross:
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By JimLittle
19th Dec 2023 19:49

Claiming R&D refund is a little subjective and don't think SAR would be warranted in this case.

The client was copied on the email so wouldn't know if I provided the PC it would breach GDPR since the director was a aware of the PC email.

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By CW2012
19th Dec 2023 12:49

How many times do we have to see this, client leaves because someone else is getting them a cheaper tax bill, I had one who was advised to claim a deduction against income and the vat back on a TV, he was a builder .

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Replying to CW2012:
paddle steamer
By DJKL
20th Dec 2023 16:53

TV based CPD- he watches Auf Wiedershen Pet reruns

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By Truthsayer
19th Dec 2023 12:51

'Do I wait for them to send the notice before replying to their accountants?' No. Ask the client immediately for permission to disclose to the new accountant.

'Do I have to give them a refund based on the work not carried out ?' Only you can answer that. It depends on what the contract said, and whether you want to do it.

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By Truthsayer
19th Dec 2023 13:02

'I am fine for clients leaving and don’t care why but at least have the courtesy to inform me beforehand.'

This has happened to me lots of times. It just means you can rid yourself of a bad client. Don't fret about it.

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Replying to Truthsayer:
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By JimLittle
19th Dec 2023 19:39

Really lots of times ? This is the second time and though first time it was a friend and did actually make my point very clear how discourteous it was to receive a sudden letter from another accountant asking for PC.

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Replying to JimLittle:
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By WinterDragon
20th Dec 2023 00:37

I get the feeling that you are taking this far too personally. Is it really worth agonising over to this extent?

I must say, I'm also concerned by the fact you mentioned in an earlier comment that had the client provided notice and approached you first then you would have gladly given a refund. I feel this says more about you than it does the client - why be so petty over a bruised ego?

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By ireallyshouldknowthisbut
19th Dec 2023 13:28

I would ignore notice period and refund as matter of principle, retaining only sufficient to cover the work doe.

This also means even if they never come back (and indeed you don't want them to) they are less likely to bad mouth you, and might even recommend you. Reputation is worth more than a couple of months fees.

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Replying to ireallyshouldknowthisbut:
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By JimLittle
20th Dec 2023 11:21

In fact, I was hoping they would leave especially after that Spurious R&D Claim and then keep claiming for expenses that were not allowable.

They can bad mouth me if they want. Some people are just ungrateful. Fortunately, I am in a position where I don't need any more more work.

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By Kaylee100
19th Dec 2023 18:55

It's really not worth your energy pushing back.

Ask the client for their permission in writing to pass the information requested on, do all the things you have to do, and let them move on.

Lots of people cannot face up to people and difficult conversations. It says more about them than you. So, remain professional and keep your head held high.

Don't let them.drag you down

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Replying to Kaylee100:
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By JimLittle
19th Dec 2023 19:43

Yes that seems the consensus on this forum, Will just provide the clearance after Christmas and be done with them. I don't think I will wait for the client to give formal notice.

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By railwayman2
20th Dec 2023 09:56

It's never easy when this happens, especially if you are conscientious and helpful in
your work and your own nature. Disengage in the simplest way, try to forget it and press on with your other clients. If you are tempted to "get your own back", remember that, with these sort of people, it will always be your fault never their's !
It is an unfortunate fact that, in life generally, as in any practice or profession, some of the "best" clients or customers, eventually turn out to be the most selfish and untrustworthy, while some of the "roughest" turn out to be the most honest, appreciative and kind and "the-salt-of-the-earth".

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Replying to railwayman2:
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By JimLittle
20th Dec 2023 11:08

When you go out of the way to help them and and provided services where you have not charged them just to help them then they can't even bothered to spend one minute sending an email that really annoys me. There again it annoys me when people in general cannot be bother to communicate. For example, if I had arranged to meet someone and they cannot be bothered to turn up.

If they had a courtesy to send an email or call then no issues whatsoever.

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By petestar1969
20th Dec 2023 10:41

Don't waste much energy on it. Ingrates will always be ingrates. I would say don't give a refund, give the usual bland response to the clearance and move on. File a SAR too, they generally get ignored, but if you file you can't later be told off for not doing so.

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Replying to petestar1969:
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By JimLittle
20th Dec 2023 11:11

I am thinking on what basis for the SAR. The R&D Claim was wrong however you dress it up which these companies are good at concocting stories but it maybe did not be considered to be tax evasion.

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By listerramjet
20th Dec 2023 11:06

It sounds like you have carried out work. Presumably you need client clearance to release their information to the new firm. So why not write setting out the position as you see it, with your final bill plus costs of dealing with the handover, asking for payment by return and confirmation of that clearance? I guess you realise you are on a hiding to nothing so make it as painless as possible and move on!
The professional question for you is perhaps whether you have grounds or any obligation to do anything about the reclaim of corporation tax, based upon your suspicions?

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Replying to listerramjet:
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By JimLittle
20th Dec 2023 11:15

I am not entirely sure if I need separate permission to release information since the client has been cc on the email. There is nothing due since they have paid monthly and I have raised an invoice for December fees. I don't think I can ask for the December fees as they have paid in advance for services.

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By cbp99
20th Dec 2023 11:35

A copying B on an email to C does not amount to B communicating anything to C.

I would reply to the incoming accountant's email stating I would be happy to reply as soon as I have received formal written permission from ex-client.

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Replying to JimLittle:
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By Truthsayer
20th Dec 2023 11:36

'I am not entirely sure if I need separate permission to release information since the client has been cc on the email.' If you're not entirely sure on that point, you should be if you are a practicing accountant. YOU DO NEED PERMISSION. The cc means the incoming accountant has merely told the client that they have asked for information. You cannot infer agreement by the client if you hear nothing.

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By mydoghasfleas
20th Dec 2023 11:46

The equivalent of being dumped by text. It happens and most if not all of us have been there to.

I think you are looking at 2 things here, the relationship with the client and the fees.

On the relationship, it looks like your feelings are hurt. You have (in your opinion, we are hearing one side only) courted the client, gone out of your way to help and the first you hear that he has gone is the clearance letter. Perhaps he -

- was unhappy with your work in some respect but was too embarrassed to say so. OR

- did not want a, "It's not you it's me" conversation.

- did not want a confrontation, most people do not.

Would you receiving a notice letter really have made much difference to what you feel?

It may one of the respondents here wrote that clearance letter. Some of the sympathy may be crocodile tears, who knows? It is a forum. I have seen the occasional trolling it is not endemic. When you ask about disrespectful clients you are putting your personal feelings out to strangers.

As for waiting for a one month notice letter and the fees paid in advance.

Do not do the former, I think the clearance letter makes it plain he is leaving, why draw it out? It seems a little petty, so do not rise to it.

On the latter, if your EL was clear do not repay. It might make him ask and then you can point it out and ask what was the problem.

It is water under the bridge, do not waste emotion or energy on it. Clients can be fickle, some even rectal sphincters. Focus on keeping those clients you have and finding new ones.

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Replying to mydoghasfleas:
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By JimLittle
20th Dec 2023 12:36

Its probably equivalent of being ghosted. Yes I just have standards I expect from people in general. They can go but at least say you are going. I don't need to know why.

Yes there could be something that I have done that I am not aware or they wanted an even better service from an accountant. Admittedly I haven't been proactive with them in the past following the R&D fiasco.

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By railwayman2
20th Dec 2023 11:52

Truthsaver - agreed, you do need specific permission from the client to release information to a third party. It is possible that he may have had just an initial interview with the new accountants, not yet properly decided to change or instructed them to act, but they have pre-empted this (intentionally or otherwise?) by writing to you ?
On occasion in the past when one of my clients has decided to move, the new accountants have provided a letter from the client confirming authority to release any information required.

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By Husbandofstinky
20th Dec 2023 13:14

I can't really add to what has already been mentioned.

This reoccuring story is as old as the hills and everyone in practice has encountered this. There always feels an injustice but the best course of action is to comply via the proper channels with the minimal amount of fuss and crack on with the countless other tasks to hand.

I would obtain client authority, refund any moral excess fees i.e. charge only for work done irrespectoive of the LoE. Submit an SAR.

You will constantly find those out there who do not have the same standards as yourself and will no doubt come across this situation again sometime in the future.

Try and have a decent break before the truly manic season begins (again).

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Replying to Husbandofstinky:
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By JimLittle
20th Dec 2023 14:43

ok understood . This has been been useful posting this question. I do agree with everyone apart from the part of refunding fees. If they request a refund then will consider it.

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By indomitable
20th Dec 2023 15:00

Just let it go. This is part of being in business and in practice. It doesn't matter, don't get upset.

Even though you say you don't mind clients leaving it appears you actually do. If you don't think this was anything to do with your work then let it go.

Some clients can be very funny, but remember clients are not your friends, so the more unemotional the better

Put your energy into finding new clients

With regards to fees stick to what's in your engagement letter

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By Hometing
20th Dec 2023 16:26

Reply all, stating "As yet, I have had no notification of their intent to leave, nor any authorisation to disclose information to you."

Gives all parties the hints they need.

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Pile of Stones
By Beach Accountancy
20th Dec 2023 17:49

A client ditched me - I thought I was providing a good service. He on now on his third accountant after me (that I know of) in 4 years.

Pleased to know it wasn't just me!

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By Tracey Crewdson
21st Dec 2023 10:40

These things happen and it’s bothering you more than it’s bothering them.

Under contract law, I don’t think you can legally keep the prepayment. You putting in ‘no refunds’ in your EL does not supersede the law. You’ve not done any work for the advance payment so have no legal basis in which to keep it.

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Replying to Tracey Crewdson:
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By JimLittle
21st Dec 2023 13:38

You are probably right but if they push it then will work out something and if there is anything left over then will provide a refund though I will make sure it will cover all the work I did not charge for example CJRS claim and other bits to help them with their house purchase. If they can act unreasonably then so can I

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Replying to JimLittle:
stonks
By WinterDragon
21st Dec 2023 14:36

JimLittle wrote:

If they can act unreasonably then so can I

Integrity and professional behaviour are usual tenets of a professional bodies code of ethics. Might be worth a hard look in the mirror.

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Replying to WinterDragon:
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By Tracey Crewdson
21st Dec 2023 14:57

WinterDragon wrote:

JimLittle wrote:

If they can act unreasonably then so can I

Integrity and professional behaviour are usual tenets of a professional bodies code of ethics. Might be worth a hard look in the mirror.

I entirely agree with you on this. We are meant to be professionals.

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By railwayman2
21st Dec 2023 16:46

Agreed entirely !

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Replying to WinterDragon:
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By Tracey Crewdson
21st Dec 2023 14:58

.

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Replying to JimLittle:
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By railwayman2
21st Dec 2023 17:20

Sorry, but this all seems to be becoming inconsistent? The original posting seems to indicate that there had been doubts about this client's relationship for some time? ("I knew at that point the relationship was finished. though I carried on as normal". "which I found frustrating". "I think that this was a trigger for them leaving". "I knew they would leave at some point" . )
Despite this the OP seems to have been doing ongoing work for the client, so might a friendly, quite casual, chat with the client, at the time these doubts arose, helped to highlight and hopefully resolve any issues that the client was experiencing ? (It's easy to put off what might be seen as difficult meetings, but they are never as bad as one expects ! )
The OP now seems to be over-reacting to what is seen as apparent unreasonable behaviour by the client ?
Why beat yourself up about one issue and even think about behaving unprofessionally , when as you say yourself "I'm in a position where I don't need any more work" and "I've just returned from holiday" ? That sounds a good position to be in ?

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Replying to railwayman2:
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By JimLittle
21st Dec 2023 17:47

The doubts grew after the spurious R&D claim which I was not aware of. I just took the view if they go then fine. Things got better but I guess I wasn't as proactive as normal as I would normally with clients contact them to see how they were and if I could help them in anyway. My error was not disengaging after the R&D saga.

I just expect certain level of communication from anyone who I come across. Yes for any client if you go but at least have the courtesy to inform the accountant

Yes I am in a fortunate position but that's not the point

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