Ex-couple sold rental property in April 2017 year as part of their divorce. I act for both, and at the time of sale I calculated their CGT for the 2018 returns using 10% & 20%, rather than 18% & 28%. I had previously quoted percentage rates of 18% & 28% to them, but in putting the figures the next year software, I clicked the wrong drop down line.
I sent one party their tax return for signature earlier this month, and have just realised my error when doing the other. Both owe £5k more than I told them a year ago. Arggh!
I imagine I should contact my PII provider before notifying the clients as they will have made choices based on my figures. I've never claimed before and have just moved insurer.
I hate making mistakes, and this is a horrible one to find late on a Friday afternoon.
Looking for any words of wisdom...
Replies (9)
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You are probably right to notify the insurer, but once you have done so stop worrying. Clients can only claim if they have suffered a financial loss. They can't claim just because you made a mistake. On the face of it they haven't suffered a loss, just a surprise and a disappointment, which is not the same thing.
You are probably right to notify the insurer, but once you have done so stop worrying. Clients can only claim if they have suffered a financial loss. They can't claim just because you made a mistake. On the face of it they haven't suffered a loss, just a surprise and a disappointment, which is not the same thing.
100% agree with this. And the other answer that said 'stop worrying'.
I had something similar to this a year ago and notified my insurers. All came to nothing. Just renewed my PII at lowest price for years (thanks Liberty).
If they haven't paid the wrong amount of tax or submitted an incorrect return and suffered a penalty then they haven't a lot to claim for
you've provided an estimate of the liability previously, thats all
seems that the only thing that's really gone wrong is you making yourself look a bit foolish
anyone can make a mistake, its how you deal with it that counts, never BS a client, hold your hands up to them and explain whats happened, they may not be happy about it, but they are more likely to accept it if you do
They haven't lost anything, you've just given them incorrect advice.
Sure - you look a bit of a fool but neither of them is out of pocket.
Also you told them the correct figure earlier - did either of them query it ?
I wouldn’t be so quick to say that no loss has been suffered. If a client has chosen, for example, to give away £5k based on a careless underestimate of their tax bill, I’d say that a claim is in point.
Rubbish.
Cheer up, Ruddles. You're the world's biggest pessimist.
Life's never as black as you paint it.
So you’re saying that a client who decided to give away some cash because their accountant carelessly told them that they had more money than was the case wouldn’t have a case? Don’t confuse pessimism with prudence.
So you’re saying that a client who decided to give away some cash because their accountant carelessly told them that they had more money than was the case wouldn’t have a case?
Yes.