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New accountant advising client to withhold payment

All work complete and agreed but payment advised not to be settled until detailed work sheets sent

We have clients who have recently moved. They are withholding payment for the accounts and CT600 under the advice of their new accountant until he recieves everything he wants - which is beyond any usual handover.

I've already sent over the last set of accounts, CT600, trial balance, fixed assets details, bank reconciliation and notes on accounts. They are now asking for more details and working papers.  Are there are guidelines or ethics involved for a new accountant to prevent payment on work that has been completed, agreed and submitted?

He has no qualifications and is not beholdent to any accountancy bodies even though he's apparently very experienced.

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By SXGuy
20th Nov 2017 12:07

You are perfectly within your rights to withhold information until payment has been received. In fact you have probably done more than I would have already.

I'd write back and say until such time as payment for services have been received we reserve the right to withhold information relating to it

And id also consider sending a letter to the ex clients advising that charges and interest will be added to outstanding payments should payment not be received. Also advise that accounts and ct600 will not be submited.

If they continue to refuse payment maybe consider hiring a debt collection agency.

Don't give in.

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20th Nov 2017 12:37

You have lost the initiative here. You should not have supplied anything until your account was paid.

How much influence do you think you'll have when the new firm and your old client have no use for you any more?

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By Mr_awol
20th Nov 2017 15:30

Obviously you should hold back as much as you can if you haven't been paid as it's your main leverage. However you mention a CT600 so I assume that this is a corporate client. As such, you need to be quite careful here.

ICAEW deal with this at 210.16 of the code of ethics. That said, you state that the new guy isn't qualified/a member of any professional body but are you? Even if you aren't, you may have a legal duty to hand certain items over so take advice (or at least be very sure of your obligations) if they start insisting.

Is there a reason you lost them? If they (or the new guy) are suggesting the accounts are wrong then this may be a reason for wanting to withhold payment. I have a case now where last year's accounts are clearly complete crap but the o/s fees are small so I've taken my normal stance and suggested paying off the previous advisor to get the handover done quicker - but if the client owed ££££ for this pile of [***] then I'd be telling them not to pay.

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By HOBBSS
21st Nov 2017 10:02

I'm MAAT. But I have handed over all the usual requests for a new accountant such as accounts, TB, Notes, FA register and CT600. The reason we lost the account is due to the nature of the business, I'm not qualified to sign off their accounts because they are lettings and estate agents. Even though the person taking over has no qualifications he works at a practice run by Chartered partners that can sign it off. The accounts are fine, were agreed and they have no need to be re-done and in fact was told that they would pay the invoice as soon as the accounts were submitted. I was only their accountant for one year due to us merging with a retiring accountant, which is why it's not the easy. The new accountant is struggling with things like reconciliations and financial agreements, absolute basics I would say. He doesn't understand why the figure in the accounts is not exactly the same as the bank statements and doesn't seem to understand that there are outstanding payments. It's ridiculous. Plus the book-keeping was done on site so he could see everything had they not deleted it. I'm a little annoyed to say the least!!

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to HOBBSS
21st Nov 2017 10:09

HOBBSS wrote:

The reason we lost the account is due to the nature of the business, I'm not qualified to sign off their accounts because they are lettings and estate agents.

You'll have to explain that one. You don't need to be qualified. Do you mean the ARLA report?

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By HOBBSS
to andy.partridge
21st Nov 2017 11:42

Yes the ARLA report requires ICAEW, ACCA or AAPA

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By chatman
to HOBBSS
21st Nov 2017 12:12

What's AAPA?

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By HOBBSS
to chatman
22nd Nov 2017 08:57

The Association of Authorised Public Accountants

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to HOBBSS
21st Nov 2017 12:13

But that is entirely independent of preparing the accounts and tax return.

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By Mr_awol
to HOBBSS
21st Nov 2017 11:49

If the person taking over and causing the problem works for a chartered firm then there should be an engagement partner you can try and deal with - or is he an unqualified partner/director in the chartered firm?

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to HOBBSS
21st Nov 2017 12:21

If the firm that the new accountant works for is run by Chartered partners, surely it is a Chartered practice. In which case, the status of an individual working there is irrelevant.
If you are dealing with a more junior member of staff, I would contact the partners and determine why their staff are advising the client not to pay an outstanding debt.

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By Mr_awol
to bendybod
21st Nov 2017 13:23

Exactly.

However, just because the person involved isn't qualified, doesn't mean that they aren't a partner - which is why I checked.

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By SXGuy
21st Nov 2017 10:18

I see no reason why the ct600 can't be withheld regardless of body you work under. If payment for services have not been made then technically the ct600 may not have been completed. Nothing to hand over..

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21st Nov 2017 11:27
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By Matrix
21st Nov 2017 11:48

I believe that your working papers belong to you. Tell the ex client that you have provided everything you are required to provide and you should be grateful if he would settle the invoice.

I only ever file tax returns/accounts etc once payment has been made in full.

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21st Nov 2017 12:48

It looks like time to forget what the other accountant has recommended. Look after yourself

Send a letter demanding payment have a look at https://www.thomashiggins.com this company charges a very small fee for the first letter

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By Mr_awol
21st Nov 2017 13:45

Deleted post as the formatting didn't work

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