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Disengaging Client

Can I backdate Fees

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I am planning to disengage a client who I intend to spend a lot of time chasing on fees and for information.

My client was suppose to file the CIS but I have filed it as client is too busy.  I didn't even charge him.

He has paid monthly fees (albeit late) for the 2019/20 accounting year so will have to refund him but wondering if I could charge him the 12 month CIS filing to offset part of the refund due.  I think he is under the impression the CIS filing is included in the monthly fee but it is not mentioned in the engagement letter.

 

 

Replies (18)

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By mrme89
22nd Oct 2019 11:04

Did you warn your client that there would be a fee for filing CIS? Or, as I suspect, are you now trying to see what you can get out of the client before you dump them?

If the latter, I think what you propose is unethical and you should just disengage and move on.

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Replying to mrme89:
Hallerud at Easter
By DJKL
22nd Oct 2019 11:13

Agreed, what goes around comes around, once you get a reputation as a "squeezing, wrenching, grasping, scraping, clutching, covetous old sinner" it can take a visit from three ghosts and a great deal of money to recover your reputation.

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By JCresswellTax
22nd Oct 2019 11:11

It hasn't been agreed either way so I would make a charge for the work carried out on a time-cost basis.

Unethical? I think not!

Thanks (2)
Replying to JCresswellTax:
Hallerud at Easter
By DJKL
22nd Oct 2019 11:17

When I go out for a meal and they bring , unbidden ,water to the table and bread and even a little butter I think I would not be a happy chappy if these turned up on my bill, I did want them, I maybe even needed them, but nobody told me they were charging me for them- if you are going to charge for extras highlight before you do the work not after; it is these sorts of things that can/have given professionals a bad name with clients.

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Replying to DJKL:
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By Mr_awol
22nd Oct 2019 12:00

Indeed. Or, if I order a takeaway and they throw in a couple of papadums I don't expect to pay - but if I ask for a couple then I fully expect to pay. In practice, I normally do ask for them, as I don't want to miss out by relying on a freebie. I'll admit I do resent paying for them a little bit because im pretty confident that if I didn't ask for them I'd still get them anyway. It's a dilemma...…………

Fortunately the ethical 'dilemma' as to whether I would rip off a soon to be ex client is rather more straight forward. I absolutely wouldn't go back and try to justify 12 months worth of stuff I didn't originally intend on charging just to try and reduce the refund my client was entitled to.

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Replying to ImmanuelLieber:
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By Mr_awol
22nd Oct 2019 14:09

Perhaps - but it's a cause of frustration that there isn't a standardised policy for these things. Prawn Crackers offer so much more certainty.

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Replying to Mr_awol:
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By johnhemming
22nd Oct 2019 16:03

The level of certainty relating to pro bono prawn crackers varies according to the latitude of origin of the style of cuisine.

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Replying to JCresswellTax:
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By Mr_awol
22nd Oct 2019 12:15

JCresswellTax wrote:

It hasn't been agreed either way so I would make a charge for the work carried out on a time-cost basis.

Unethical? I think not!

I disagree quite strongly I'm afraid.

If I'd just 'forgotten' to bill it and it was always chargeable then i'd probably email the client explaining my error and asking if he was ok with an invoice. I might even offer a bit of a discount to sweeten the deal.

The way I read the OP these weren't intended to be chargeable if the relationship had continued.

If I'd never intended charging him and he left, I think it would be stooping quite low to deduct these fees from his refund. It's always disappointing to lose someone you've supported/invested time in but I still think it's unethical to retrospectively charge freebies.

If it was MY decision to ditch the client, and I STILL tried to milk him on the way out, then unethical is putting it mildly I'm afraid.

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Replying to Mr_awol:
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By Andy L
23rd Oct 2019 16:07

The analogies here are quite inappropriate.
You aren't in a retail environment where there's an invitation to treat, you are engaged to look after this person's tax affairs and as such if that does end up involving preparing a submission to keep them on the straight and narrow then it's not unreasonable for there to be an expectation to receive a fee for your time.
Bill it, if they want to query it then it can be discussed. Unethical? Nonsense.

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Replying to Andy L:
By JCresswellTax
23rd Oct 2019 17:13

Perfecto!

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Replying to Andy L:
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By Mr_awol
23rd Oct 2019 17:31

Andy L wrote:

The analogies here are quite inappropriate.
You aren't in a retail environment where there's an invitation to treat, you are engaged to look after this person's tax affairs and as such if that does end up involving preparing a submission to keep them on the straight and narrow then it's not unreasonable for there to be an expectation to receive a fee for your time.
Bill it, if they want to query it then it can be discussed. Unethical? Nonsense.

You've missed the point. You seem to be focussing on what is legally enforceable. If an accountant chose to make a deduction from their client's refunds/POAs then the client may well struggle to get the money back - if indeed it was worth the hassle.

I'm looking at what a professional advisor would do in the ethical context - which was the point raised by mrme which jc tax took issue with.

I gave one example of where a charge may be justified (albeit one that isn't particularly relevant to the OP), one which was pretty low (some may call it 'sharp practice' I suppose) and one which I would expect from someone with the morals similar to that of an adjustable bed salesmen who preys on the elderly. Which of my three scenarios do you agree/disagree with, and why?

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Replying to Mr_awol:
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By Andy L
23rd Oct 2019 18:04

I haven't missed your point. The point you make is just invalid and you are making further incongruous analogies.

When you engage a professional to look after your affairs and they have had to incur additional time legitimately in doing exactly that then there should very definitely be an expectation of a fee being involved.

There is nothing underhand going on here. The OP hasn't even taken any action yet but when sending the adjusted credit note will I'm sure make it very clear and open what the fee is and what it is for. If the client has any issues with it then they will be free to raise and discuss them. The OP can make the case that he feels it's a fair charge. If he doesn't really feel that then I'm sure he won't issue the charge in the first place and if the client really doesn't feel it's fair then I'm sure they will come to the correct conclusion together.

Simply deciding that it's immoral to do the above and akin with "preying on the elderly" is frankly bunkum.

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Replying to Andy L:
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By Mr_awol
23rd Oct 2019 23:41

Oh dear.

For starters, the subheading of the OP refers to ‘backdating fees’ and having acknowledged that the client probably thinks the service is included in monthly charges the OP themselves ask whether they can charge the additional fee “to offset some of the refund” which suggests an ulterior motive (being to minimise the refund due). The trigger for the charge is the termination of the engagement - at the accountant’s request.

The OP has asked whether they ‘can’ do this (without specifying whether this is a legal or ethical question) but you conclude that there is ‘nothing underhand’ in keeping the overpayments. For the avoidance of doubt, I’m not questioning the OPs moral compass here as they have asked the question and the very fact that they have done so suggests that they have at least an inkling that something might not be right. I’m more concerned by those that wouldn’t bat an eyelid

Then to justify your position you post a bit of a woolly summary about a different situation which bears little resemblance to the example I gave when comparing a possible outcome to dodgy salesmen.

I’m sure we are all following the same five fundamental principles. After a fashion.

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By JoF
22nd Oct 2019 11:22

Did client authorised the filings?

How far back do you want to go with fees? A bit much if you are charging him for 12months and only just telling him about it proir to dumping him. Why have you not tackled this element earlier?

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Bramble
By Chris.Mann
22nd Oct 2019 13:54

"I think he is under the impression the CIS filing is included in the monthly fee but it is not mentioned in the engagement letter".

Communication, communication, communication, taxwizard, is the key.

Didn't he have every right to "think" that the CIS filing was included in the monthly fee?

No matter what we "think", we have to set out our t's & c's, without ambiguity. IMHO.

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By pauljohnston
23rd Oct 2019 10:54

So if it was not in the monthly bill listing of services. It is a discrectionary charge. Look at your Terms of Engagement, it should say something like if it is not included then we will charge a fair fee.

So bill him and point out that if you had not submitted that he would be looking at a penalty of.....

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By Matrix
25th Oct 2019 07:17

Of course you deduct fees for work done. Are others suggesting that, if he has made 9 payments on account for the accounts, that nil should be deducted for the work done,e.g., 9 CIS returns? Why would you refund fees in full when work has been done?

If he has assumed it was included in the fee then he has already paid for this work so I don’t see the issue.

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Replying to Matrix:
By JCresswellTax
25th Oct 2019 10:19

Agreed, I really don't see the unethical side of billing for work done.

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