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Mistake with potential PII claim

I miscalculated CGT a year ago when giving an estimate of this year's liabilty

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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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By johngroganjga
27th Jul 2018 17:34

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.

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Replying to johngroganjga:
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By Hanleymail
28th Jul 2018 17:05

johngroganjga wrote:

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).

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By ohgoodgodno
27th Jul 2018 17:47

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

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RLI
By lionofludesch
27th Jul 2018 18:03

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 ?

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By Ruddles
27th Jul 2018 18:39

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.

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Replying to Ruddles:
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By lionofludesch
28th Jul 2018 17:13

Rubbish.

Cheer up, Ruddles. You're the world's biggest pessimist.

Life's never as black as you paint it.

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Replying to lionofludesch:
By Ruddles
28th Jul 2018 18:27

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.

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Replying to Ruddles:
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By lionofludesch
28th Jul 2018 22:22

Ruddles wrote:

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.

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Replying to lionofludesch:
By Ruddles
29th Jul 2018 09:39

Hmmmm

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