Opinions on how to follow up ...

Disappointing response from the previous Accountant

Didn't find your answer?

May I have an opinion from fellow accountants please.

In March of this year, we spoke to a potential new client who was unhappy with his current firm of Chartered Accountants, who, in spite of having received reconciled Xero records in August of last year, had failed to meet the (extended) deadline for SA submission. The client had contacted the accountant on several occasions and was told in mid January that his return had already been submitted. He questioned this several times, as he had never been asked to approve the return. Eventually, it became evident that the return had not been submitted (even within the extended deadline) and the client was issued with a £100 penalty.

Accordingly, he felt it reasonable to deduct this from his accountant’s bill which he received together with a copy of his 2020 SAR in March of this year. The accountant accepted this to be fair and apologised, blaming a technical issue.

In April, we wrote to the Accountant requesting clearance to act and the usual supporting handover information. We received no response. 5 and a half months,  3 letters and 3 telephone calls later, and we were advised (in September)that the Managing Partner was unavailable to speak to us, but that they were waiting for something from the client before they could authorise a hand over.  The client telephoned and wrote a couple of times but was unable to speak to anyone!

The client has a significant sole trade with a turnover in excess of £700,000 and a large workforce. He uses a payroll bureau and has an excellent bookkeeper. The fee was around £1500. They had used their previous accountants for some years.

This morning, we received a letter and a copy of the last submitted self assessment return. The letter read as follows:

 

We can confirm that we are not aware of any reasons why you should not accept appointment as

accountants and tax advisers.

Please find the information requested enclosed:

- A copy of the last submitted Income Tax Return: Attached

- We were not instructed to prepare full accounts for Mr X. We therefore do not

hold Confirmation of closing balances or reconciliations.

- Income Tax computation: Attached

- Capital Allowance Claims: N/A

- We do not have any other relevant information

 

The self assessment return copy they provided confirmed that AIA of £49,000 had been claimed in 2019-20.

We have spoken with the bookkeeper who has confirmed that the bookkeeping records were very different from the figures included in the SAR and that the accounts provided to the client confirmed, as you would expect,  that significant adjustments were made in the preparation of the accounts. They did not respond to the bookkeeper’s request for further information.

The previous accountants provided the client with ‘full’ accounts (which they are passing on to us) but the invoice they issued has never referred to any accounts preparation – instead they charged £1500 for preparing a self assessment return.

It is clear that we will not get any further information from the Accountants and I wondered if any one else has come across a similar situation.

Replies (24)

Please login or register to join the discussion.

David Winch
By David Winch
21st Sep 2021 16:16

Did you mean to show the taxpayer's name in your question?

Thanks (7)
Replying to davidwinch:
avatar
By Hugo Fair
21st Sep 2021 16:50

You do know that you can ask the site administrators to edit your post (i.e. remove or asterisk the name of your client within the extract section)?
I would seriously advise you to do so - pronto!

Thanks (2)
Replying to davidwinch:
avatar
By David Ex
21st Sep 2021 17:12

davidwinch wrote:

Did you mean to show the taxpayer's name in your question?

Lol!

Thanks (1)
Replying to David Ex:
avatar
By Hugo Fair
21st Sep 2021 17:42

Hope it's not the self-employed individual with the same name who is a Barrister?

Thanks (1)
Replying to davidwinch:
avatar
By User deleted
21st Sep 2021 22:34

Unless the client is actually the front man of The Human League and the OP did in fact change the name slightly for anonymity......

Thanks (1)
avatar
By Tom Cross
21st Sep 2021 16:18

Can the client provide you with a copy of the original letter of engagement, together with any subsequent variations? What were the defined instructions?

You cite at least a couple of occasions when this firm of accountants vary from fact.

"The client had contacted the accountant on several occasions and was told in mid January that his return had already been submitted
Eventually, it became evident that the return had not been submitted (even within the extended deadline) and the client was issued with a £100 penalty".

"Capital Allowance Claims: N/A
The self assessment return copy they provided confirmed that AIA of £49,000 had been claimed in 2019-20".

However, I'm not at all sure what you hope to gain from revisiting the previous firm. What I am pretty confident is, there will be no useful outcome and time will have been expended on a potential fruitless exercise.

From what you say, you have the support of a decent book-keeper and, with that in mind, I'd be very tempted to move on, as I can't see that anything will be gained by further futile enquiries.

Thanks (1)
avatar
By SXGuy
21st Sep 2021 16:31

While I sympathise as the post above me says. This is a fruitless exercise with no real merit. You have all you need to just move on.

Thanks (1)
Replying to SXGuy:
avatar
By adam.arca
21st Sep 2021 18:25

SXGuy wrote:

While I sympathise as the post above me says. This is a fruitless exercise with no real merit. You have all you need to just move on.

I’m not sure that it follows, just because the OP has received a reply, they “have all [they] need to just move on.” Even if they think they do, I would be tempted to write a response to effectively reserve my position in the event that further queries do arise.

As for the outgoing accountants, actually preparing accounts but saying in the handover letter that they don’t and not referencing what they do in their invoice sounds like a mini-scam with possible negative impacts upon their clients in circumstances like these. I would give serious thought to making a complaint to the professional body (which has the beneficial side effect that the OP is then bullet proof vis-a-vis the client if something nasty comes out of the woodwork down the line).

Thanks (1)
avatar
By Hugo Fair
21st Sep 2021 17:01

It's not clear what question you're asking.
It seems evident (based solely on the info in OP) that the previous accountants have provided your new client with a shoddy service over the past year - whether due to specific circumstances during that period or their general level of performance.

However, you've not mentioned any outstanding detriment for your client - nor, more importantly, the absence of anything that prevents you from proceeding to deliver a better quality of service from here on (although observation of confidentiality needs to be brushed up).
So, other than the nasty taste left in the mouth from observing the less-than-golden performance of the previous accountant (there are bad eggs out there and of course people who make occasional mistakes), what is it that you're asking?

Thanks (1)
avatar
By Waves
21st Sep 2021 17:19

Synergy Chartered Accountants?

Thanks (0)
Replying to Waves:
avatar
By suepg
22nd Sep 2021 10:47

I am not familiar with them.

Thanks (0)
Replying to Waves:
avatar
By suepg
22nd Sep 2021 11:26

That is not my trading name (if that is what you were asking)

Thanks (0)
avatar
By Calculatorboy
21st Sep 2021 18:24

I'd be more worried that you've disclosed client name and we know his t/o is £700k ..hope your pi covers it

Thanks (0)
avatar
By Paul Crowley
21st Sep 2021 18:59

"it is clear that we will not get any further information from the Accountants and I wondered if any one else has come across a similar situation."
Yes quite often
Try getting any response at all from the "accountants" on service charge companies.

Are you confident that there are no bf capital allowances Balance?
That is usually the left over last item to consider before just accepting and moving on

Thanks (0)
Replying to Paul Crowley:
avatar
By suepg
22nd Sep 2021 16:14

No, not at all confident and the amount claimed was actually AIA which, ordinariy should make the situation clearer but which did not correspond with the information provided by the bookkeeping records. There is no FA register - yet!

Thanks (0)
Avatar
By I'msorryIhaven'taclue
21st Sep 2021 20:48

I spent some enforced time learning this afternoon all about the newly enforced GDPR and the repercussions of not replying to their postal missives. A number of clients have received speculative letters from ICO urging them to enrol and cough up the registration fee or - and here's the key point - otherwise reply to affirm that they are exempt. All are exempt from registration, but the inference is that if they don't reply to that effect there will be a follow up.

The tripe that's served up continues by imploring the recipient to enrol whether he / she / the company is liable to registration or not, on the grounds that such unnecessary enrolment would serve to signal to the rest of the world that the business (even though it may be exempted from registration) takes the world's data protection seriously. Jeezalu!

None of which serves to aid the OP, other than to advise that you now need to advise of your data breach or otherwise face a fine with a max ceiling in excess of £300k.

What a crazy country we've become: one strike and you're potentially out! Maggie Thatcher got rid of a good deal of such red tape nonsense, but it seems it's crept back when our attentions were elsewhere.

Thanks (0)
Replying to I'msorryIhaven'taclue:
boxfile
By spilly
21st Sep 2021 22:22

The ICO letters are ridiculous. I’m wondering if they’ve obtained a database from Companies House as they seem to be sending them out to every single company. We’ve only had one that needed to register as they have security cameras, and none of the others see the point in enrolling on the ICO site (probably as we won’t do it for them).
It’s not a new thing though, just a different body on the make. A few years ago it was the Performing Rights Society chasing to see if anyone listened to the radio or music whilst at work. And before that we were being warned about needing TV licences. So it should hopefully all blow over in another year or so.

Thanks (1)
Replying to spilly:
ALISK
By atleastisoundknowledgable...
22nd Sep 2021 06:22

They’re another bit of junk mail I bin for everyone.

Thanks (0)
By Duggimon
22nd Sep 2021 09:31

It will be more work to get the information from the old accountants than it will be to just work out a best guess and regularise things from here on it. It shouldn't be too hard to figure things out from what you have in a way that will have minimal/no tax consequences in terms of guessed balance breakdowns. You might not know what the accruals are, but they're probably all from the P&L, likewise prepayments, trade creditors, debtors etc. You know the pool values from the WDA claimed.

Thanks (1)
Replying to Duggimon:
avatar
By suepg
22nd Sep 2021 16:18

We cannot establish the pool values as the claim in the SAR was actually for AIA, but it actually appears to be a combination of AIA & WDAs, according to bookkeeping information

The client has provided copies of earlier years self assessment copies so we are able to make a relatively educated calculation

Thanks (0)
avatar
By Matrix
22nd Sep 2021 16:33

Push it back to your client. He must have signed the return which didn’t agree to the bookkeeping records and then paid the fee. If he wants you to have a better starting position then he will have to ask for any missing info. Otherwise if they say there are no WDV balances brought forward then go with that unless he wants you to redo the year.

Thanks (0)
Replying to Matrix:
avatar
By suepg
22nd Sep 2021 20:38

The client did not sign OR digitally approve the tax return, in fact he never saw it.It appears to have been submitted sometime after the extended deadline of 28th February without his approval

Thanks (0)
Replying to suepg:
avatar
By Hugo Fair
22nd Sep 2021 21:35

Unfortunately your original question (whether "any one else has come across a similar situation") got lost in the issue of accidentally named client ... a bit like this core info (which was mentioned in OP) got obscured by the length of the post.
BTW those are not aspersions, just why IMO we've only now come face-to-face with the big issue:
* If the client did not sign OR digitally approve the tax return, then who did? And to where have they been submitted?

And the big issue for your client (aside of any litigious intent) must surely be whether he's prepared to accept those accounts or would prefer (and is willing to pay for) you to re-do them?

It's great that he has an excellent bookkeeper and obviously imperative that staff continue to be paid properly by the bureau ... do you have any idea of either how long he used the ex-accountants or why he decided to move?
I only ask (not wanting the answers here) because, although it sounds like he's been poorly served, we've (or rather you've) only had one side of the story.

Thanks (1)
avatar
By suepg
30th Sep 2021 14:11

Thank you all for your replies.
We have now done some work on the accounts and have had a closer look at the inclusions in last year's SAR. It appears that the previous accountant, copied over the P&L account from the bookkeeper's Xero records straight into the SAR without even going through it and checking it or making any year end adjustments.

This is not just a shoddy service for a Chartered Accountant, it is and expensive shoddy service. ..however, it explains why they could not provide a handover!

Thanks (0)