Share this content

Tax Arrears and Delinquent Clients

How far do you let them go before you call it quits

Didn't find your answer?

The title says it all but just keen to get the opinion of other members in practice.  

I understand that ultimately it is the Director's responsibility to ensure that they are not trading insolvently in the case of a limited company but in practical terms how far would you personally go in supporting clients to pay their taxes in full and on time before you throw in the towel and resign.

Would the size of the liability in arrears have a bearing? Perhaps the number of years they are behind? Any efforts made by the client to settle the amounts due?  What about mitigating circumstances (personal problems etc)?

Just keen to get some thoughts and all opinions welcome.

Replies (23)

Please login or register to join the discussion.

the sea otter
By memyself-eye
07th Dec 2021 15:43

As long as they pay your bill, why would you care?

You cannot save the whole world (only some of it!)

Thanks (3)
Replying to memyself-eye:
avatar
By Tax is always taxing
07th Dec 2021 16:00

Agreed
Just give them the right advice, don't let them build up large overdrawn DLAs, and if its the best option, use their Ltd liability status wisely!

Thanks (0)
Replying to memyself-eye:
By williams lester accountants
07th Dec 2021 19:32

+1, not your fight. As long as they pay your bill and you notify them of tax due and due date, all is left up to the client…..

Thanks (1)
Replying to memyself-eye:
avatar
By Michael Davies
10th Dec 2021 10:24

Exactly.

Thanks (0)
A Putey FACA
By Arthur Putey
07th Dec 2021 16:19

I'd like to get rid of some delinquent clients who don't have tax arrears!

Thanks (2)
Replying to Arthur Putey:
avatar
By claudialowe
07th Dec 2021 16:20

You and me both Arthur!

Thanks (0)
Replying to Arthur Putey:
avatar
By Catherine Newman
07th Dec 2021 16:54

LOL. And me in fact I hope I got rid of an annoying one yesterday. When she wants her accounts done it has to be now and face to face and texts me disrupting me all day. She then says she is worried about her accounts. The usual story. Not sufficiently concerned in the summer months.

Thanks (0)
Replying to Catherine Newman:
avatar
By RobbieT
07th Dec 2021 17:36

I presume your engagement letter includes "any work deemed to be on-demand especially where previous correspondence has been ignored, will attract a mark-up against our standard fee basis, and payment in advance of completion"

Thanks (1)
Replying to RobbieT:
avatar
By Vallery Lee
10th Dec 2021 10:10

Brilliant - I will use that if I may

Thanks (0)
Replying to RobbieT:
avatar
By Vallery Lee
10th Dec 2021 10:10

Brilliant - I will use that if I may

Thanks (0)
Replying to Catherine Newman:
avatar
By Leywood
07th Dec 2021 17:43

Like a child stamping their feet, if you give in once they will expect it every time.

Dont let anyone disrupt your day if you do not wish to be disrupted, or unless its for a client who is genuinely in need of an urgent response who usually doesnt mess you about.

Thanks (1)
Replying to Leywood:
avatar
By Jimess
10th Dec 2021 09:44

I wholeheartedly agree with you on that. I have a foot stomper client who thinks that he should have priority service and only pays what he thinks he wants to pay, usually the same amount he paid when he first became a client, never the amount commensurate with the amount of work we do for him. For quite a few years I have given a bit of ground but I had started to feel a bit resentful. This year we had a lot of extra work to do for this client, I told him before we started the work that our costs would be higher than previous years, gave him an estimate and I billed him accordingly. He tried the usual "I don't want to pay that so I shall only pay you £X" last week and when I stood my ground he went off on an enormous rant. When he ran out of breath said weakly "none of my friends pay as much as that". Don't you just love them? His signed documents dropped into my inbox yesterday. They have been submitted and I will now disengage, I am too long in the tooth to put up with disrespectful clients any more, it's not worth it.

Thanks (2)
Replying to Jimess:
avatar
By Leywood
10th Dec 2021 09:50

You will so much better for it, as soon as that disengagement letter has gone out.

Thanks (1)
avatar
By Leywood
07th Dec 2021 17:41

Some folk can have problems but try their best, so as long as Im paid and they dont get on my nerves they can stay. But if they annoy me, they go. Life is too short.

Thanks (0)
avatar
By Catherine Newman
07th Dec 2021 19:00

Thanks everybody. All of it springs to mind. Kiss of the Spiderwoman. £100 and bottle of wine. I don't think so. She will try again on 27 January.

Thanks (0)
avatar
By MAC83
07th Dec 2021 23:13

Thanks for the replies everyone and some really useful advice.

Thankfully all the clients I am thinking of pay my bills it's just the tax office they seem to take issue with! I guess my concern is that if I continue to act on behalf of a client who hasn't made any attempt to settle their tax bill for a number of years could I be viewed as facilitating their delinquency?

Alternatively am I simply overthinking this and is it just a case of do the accounts, work out the tax, advise them of what to pay and collect my fee?

If the tax office have an issue then let them take it up with the Director/Directors as ultimately it's not my responsibility.

Apologies if this sounds like a stupid question to those who are more experienced.

Thanks (0)
Replying to MAC83:
paddle steamer
By DJKL
08th Dec 2021 10:17

My bigger concern would be, will they drag you into spending more and more time on them to the detriment of your other clients? My prior experience in FT practice was that it was the borderline insolvents who were the most inefficient clients re time recovery.

Thanks (1)
Replying to MAC83:
avatar
By Leywood
08th Dec 2021 10:33

Ah, now I assumed there was some payment of tax debts. I know, I shouldnt assume.
But if I have ones who are making no attempts to settle their tax bills, then they are disengaged.

Thanks (1)
avatar
By Jim100
08th Dec 2021 09:47

If they are nice and disorganised then can manage them fine. No issues. If they are nasty and disorganised then get rid.

Thanks (1)
By Moonbeam
08th Dec 2021 10:07

What's clear is that different practitioners take different views and you're the most important person here.
I wouldn't be happy myself with the sort of client you describe, for all the reasons you give. I'd see how things went, but would eventually crack and send them on their way.

Thanks (1)
avatar
By MAC83
08th Dec 2021 11:28

Many thanks to all that have contributed to this post and for the sage advice given. If you work on your own sometimes it is difficult to get level headed, practical advice from people who have come across things like this before.

The feeling that I am getting is that it is very much a personal decision as to how far you go in supporting these individuals and that you need to weigh up how much time you are putting in to keeping them going against what you get out of it.

Also I think I need to bear in mind whether the client is genuinely trying to improve their situation or whether they are just continuing to dig a deeper hole. If it is the former then monitor the situation and see how they go but if it is the latter let them go.

Again many thanks to all for their responses :)

Thanks (2)
Slim
By Slim
08th Dec 2021 12:21

In my experience these clients take up a disproportionate amount of time and aren’t the best fees. I’d get rid.

Thanks (1)
avatar
By Stalytax
10th Dec 2021 14:33

I just binned the client who sent me seven texts on a Saturday morning, before I was even awake. My reply to him was also many texts, as I sent it one word at a time.

Shoe boxes full of receipts on 29 January may be similarly rewarded.

I used to put up with a lot of nonsense, I guess I can afford to be more picky as retirement approaches.

By the way, yesterday I spoke to a client who has actually heard of MTDITSA, and like me, is quitting the day it comes into force. He could retire now, but prefers to keep active, however he can't be a*sed with MTD any more than I can.

Thanks (2)
Share this content