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.