Most of my clients are sole-traders who are always concerned and scared with how and when to pay.
A client just asked me if it is possible for him to transfer me on a weekly basis the VAT collected from his customers, as "I don't want to see money in my bank account that isn't mine yet". He would like to make prepayments for his future SA Tax return too. Apparently he was doing this with his previous accountants. The contractor was paying the accountants directly, and the accountants paying my client the net figure and leaving a "tax pot" from where they even charged the accountancy fees.
I never saw this before so my questions would be:
a) Is it allowed for an accountant to provide this as a service under UK Law? I would say it is allowed if I keep the money in a "Clients Account" as noted below.
b) If so, does any of you provide this service regularly and how much do you charge?
c) What are the problems you encountered providing this service?
FYI, this is an extract of the Code of Ethics of my IFA Practising Certificate:
"A professional accountant shall not assume custody of client money or other assets unless
permitted to do so by law and in accordance with any conditions under which such custody
may be taken.
A professional accountant entrusted with money or other assets belonging to others shall:
(a) Comply with the laws and regulations relevant to holding and accounting for the assets;
(b) Keep the assets separately from personal or firm assets;
(c) Use the assets only for the purpose for which they are intended; and
(d) Be ready at all times to account for the assets and any income, dividends, or gains
generated, to any individuals entitled to that accounting."