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New client - fraudulent expenses

New client - fraudulent expenses


I have recently set up my own practice, I have managed to secure quite a few clients already. However I took on a new client a couple of weeks who had been with his previous accountant for 3yrs. He works as a subcontractor on the roads. When I reviewed this years expense receipts I was quite shocked at what he was trying to put through for example gift cards for toy shops, clothes, take away receipts from the local take away even a receipt for a bracelet.

I did explain that the expenses had to relate solely to the business in which he told my they did, his previous accountant put everything through so he wants me to them through. I'm not happy with this, it goes against me ethics.
has anyone else come across this with clients?



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06th Dec 2012 11:16


I had one subbie tried to claim ladies lingerie and childrens clothing.

Tell him you will prepare the accounts/return without the personal expenditure, and be ruthless about anything you are unsure about. If he doesn't like it tell him to go 'elsewhere'.

Don't give way on this, else you will have all his mates coming and expecting the same deal!

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06th Dec 2012 11:36

I think we have all come across this at some point!

Tell him to go away and come back with something more sensible. Make it clear from the start that it is your repuation on the line and that his fee is not worth putting that in jeopardy.

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06th Dec 2012 12:46

Non-business expenses

If the client insists they are business expenses and will not allow you to either exclude them from the accounts completely or add them back through the tax computation, you have to be firm and disengage.

I would also do a money laundering report and write to HMRC to advise them you no longer act and the reasons why.

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By chloe77
to lesley.barnes
06th Dec 2012 14:22

Thank you to everyone who replied. I rang my client to tell him that unfortunately I would have to terminate my services. I explained I was not willing to put through expenses which were clearly not for his business. To my surprise he said ok, could I just put through what is allowable then. I was shocked so maybe he was testing the water I don't know but Ido know if I ever get into this situation again I will send the client packing. I suppose it's all a learning curve.

Thanks again everyone!

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06th Dec 2012 16:02

Watch out that he doesn't hold back your fees. DON'T file with HMRC until; you are paid.

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06th Dec 2012 16:08

good point bernard michael!

cover your back

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06th Dec 2012 16:24

Calm down

In my opinion, the best way to deal with this is just to ignore the questionable expenses and assume he has included by accident.

Client does not know any better and is happy, he pays your fee so you are happy and no-body has to get their knickers in a twist about morals, ethics or Money Laundering reports.

Everyone's a winner.

Of course, if he notices the omissions then see the above.



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By Tosie
06th Dec 2012 17:31


I agree completely and suspect that is what previous accountant did .

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