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Submitting TR before receiving payment

Submitting TR before receiving payment

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We took on a new client, a small self-employed person in the last few weeks of January.

Accounts prepared and billed the same as he paid to his previous accountant, which was about right, possibly a bit less than I would normally charge, but because it came within my hourly rate, I was happy to charge the same.  Client wasn't happy with lack of contact / service from previous accountant and wanted a pair of fresh eyes.

Job completed and emailled over, at which point the client says "I assumed the fee might have been less than the previous accountant, because everything was nice and tidy".

I explained that we do a proper job and don't simply add up his receipts; we have to match them to the bank and ascertain what was paid cash etc and carry out various reconciliations, in addition to the set-up cost i.e. money laundering compliance, etc.

Heard nothing back so today I sent an email asking whether he was happy.  Received the response "yes, I've even paid the tax, ok to submit".

Now I've emailed back to say that we haven't yet received cleared payment and we need this before we can submit.

I have a feeling he is now going to complain some more.

It's the evening of 31st Jan and I'm tired - am I being reasonable?  Or should we allow time to pay?

Replies (16)

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By Matrix
31st Jan 2019 20:16

You need to do whatever will cause you the least stress and go and put your feet up.

Thanks (1)
By andy.partridge
31st Jan 2019 20:18

Just keep to what you agreed, assuming that something WAS agreed?

The client querying the fee suggests it wasn’t.

Thanks (0)
By penelope pitstop
01st Feb 2019 02:22

Sounds like trouble's afoot.

Just had a client/landlord P60 and one rental property who's papers came in on 30 January (early for him).

He just expects it will all be done, dusted and filed and then he can pay whenever the mood takes him.

But he will pay his tax on time!

He's a twit! I want to sack him! but his wife and her trust I want to keep. So he has me over a barrel.

I decided to teach another client a lesson!

After sending reminder emails and text messages and phone calls she would eventually ring me up with the accounts figures on 31 January each year for a casual chat as if I had all the time in the world. It would make my blood boil.

(That is the client whose expense receipts were in the car they sold earlier that year, then another year the expense receipts were washed down river when there was a flood.) Yes, amazing but true.

So last year I just gave the one reminder and watched what happened. The deadline came and so did the £100 fine. Then a second and third penalty. So to press she owes some £1300 in penalties.

What does she do about it? Bury her head in the sand and hope it will go away. I then basically told client to clear off and use her husband's accountant.

I was charging her £30 a year because I felt sorry for her. So if she used another accountant she will be in for a big shock.

But she is still on my HMRC client list.

She just cannot be bothered with it all.

I must admit that I would not ask for payment before I file. But I do find some clients are a bit too relaxed about payment.

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Replying to penelope pitstop:
By gainsborough
01st Feb 2019 10:55

Noooo Penelope - all that hassle for £30 a year?! I would be formally disengaging her and deleting her from the HMRC client list. She clearly doesn't appreciate how generous you were being with her.

Thanks (1)
Replying to gainsborough:
By penelope pitstop
08th Feb 2019 13:13

No, but she will be soon when her new accountant starts charging the earth!
I have a picture in my mind of her crawling back to my front door begging for my services and promising to be well-behaved in the future.
I then point to the horizon and command her to "be off, and never grace my threshold again".

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By Manchester_man
01st Feb 2019 07:43

He paid it after my email so I submitted.
Thanks. (Feet are indeed up) :-)

Thanks (1)
By SXGuy
01st Feb 2019 08:25

I would never file someones tax return, without cleared funds first. Wheres your hold over this client once the return has gone in? cant exactly recall it.

If hes paid his tax in advance, he could have paid you also, gentle reminder that the fee needs paying before anything is filed. Could also remind of the penalties for failing to submit on time.

Thanks (1)
By bernard michael
01st Feb 2019 10:17

Despite my personal rule (never act for friends) I agreed to act for the son of an old school friend who had given the family company to his son. 5 years ago. Previous accountant died and left a mess.
Mess cleared up and now son having difficulty paying my fees ( mates rates),CT and personal tax
Doesn't answer e-mails on time so also picks up fines from both HMRC & Cos House which makes it worse

Lesson taught that rules is rules and should be obeyed or there be trouble ahead

Thanks (1)
Replying to bernard michael:
By penelope pitstop
08th Feb 2019 13:26

Totally agree.

Millionaire grandad.
Spendthrift son.
Chavvy grandson.

Watch for the three-generation cycle from hero to idiot client.
Just seen this AGAIN with my own eyes. It is no myth!
Just be careful about picking up any of these clients who are on the way down in this cycle.

Thanks (0)
By SteveHa
01st Feb 2019 11:05

One client who does, eventually, pay, in drips provided his info mid january, needing accounts and Return providing called on Tuesday to see where we are up to.

He's not an electronically enabled client (i.e. everything is by post or in person) was told for the first time "It's going to be late".

Oddly, no argument. Just an "OK, I'm too busy to come in and sign anyway".

Sometimes, a kick in the nuts doesn't seem to hurt them too much.

Thanks (0)
By bernard michael
01st Feb 2019 11:18

What I really do not understand is why a £100 penalty puts the fear of God into clients,who probably spend more than that in beer weekly

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Replying to bernard michael:
By Accountant A
01st Feb 2019 12:40

bernard michael wrote:

What I really do not understand is why a £100 penalty puts the fear of God into clients,who probably spend more than that in beer weekly

Presumably because it means £100 less to spend on beer.

Thanks (1)
Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
01st Feb 2019 13:05

I never submit returns without full payment. Since implementing that, I've never had a bad debt. Funny, that :)

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Hallerud at Easter
01st Feb 2019 13:19

I submit all returns etc without payment, invoice clients once a year when full job done and to date have never had to write off a fee as non recoverable.

The key is I know all my clients really well and have known all of them for a really long time.

I bill as the firms I worked for billed, in arrears.

My biggest client always pays me the day he gets the invoice, the others tend to mainly be within a week, I only have one who has delayed but I know why and we have discussed the reasons, which I accept.

If there is no trust in business there is little point being in business, or maybe I am just somewhat old fashioned.

Thanks (2)
Replying to DJKL:
By DaveyJonesLocker
02nd Feb 2019 09:15

Agree, and if you don't submit a client's signed tax return before the deadline there's an argument you haven't done all of your job

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By Manchester_man
02nd Feb 2019 02:10

Yes I do submit returns for clients who have built up a track record, who I trust, which is almost all of them as I tend to dump clients I don't trust.

For example, I've got a load of billing still to do, for returns that have been submitted.

I have this 'no submission before payment' rule essentially for new clients who appear for the first time in January. Even then, I will make a judgement, but this guy queries the bill after I'd told him it would be around the same as he paid the previous year. He queried it on the basis that "my books were near and tidy so I assumed the fee might be less".

He learned a lesson anyway... Never assume. What's the saying, 'when you assume, you make an [***] out of you and me'.

I am very fair with fees and most clients are happy to pay for the work I do for them. Any who are not, are not the type of client I want.

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