We acted on a client’s verbal instructions to prepare and submit the annual accounts and CT return for his company to Companies House and HMRC in good faith and with the understanding that he will physically sign them subsequently. (I know may be we shoudn't have relied on verbal approval but given that we knew him for 14 years and lockdown, it seemed reasonable at the time.) After the accounts were submitted, the client changed his mind saying the accounts were incorrect and denies giving verbal instructions and approval. The deadline for submitting accounts is 31 March 2021. We immediately offered to prepare and submit the amended accounts and CT return but the client now demands that we provide him services for free over next six years in case there is an enquiry or tax investigation from HMRC. We strongly believe that his demands for providing free of charge services are unreasonable. We also strongly believe that these unreasonable demands also show, his intentions for subsequently denying verbally approving the accounts once submitted, by trying to obtain free services and shift the blame for initiation of a tax investigation/enquiry by HMRC, on us. There is probability of a tax enquiry by HMRC into his company anyway, due to his repeated failure to pay PAYE taxes for more than 3-4 years.
During this time, he has been very abusive verbally and made threats for taking legal action. We have two questions:
1. Should we disengage or try to help him submit amended accounts and return?
2. Given that the deadline for filing the accounts is close, are there legal consequenses against us that we should be aware of if we were to disengage?