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The rudest clearance request I have ever seen

The rudest clearance request I have ever seen

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Briefly the facts are -

  • Client (sub-contractor) subjected to a routine s9 investigation.
  • We ask the client to return his prime records (basically a box of receipts + bank statements) to allow us to double check eveything and submit them to HMRC.
  • Client returns his records to us, and it quickly becomes apparent that he did not give us everything the first time.
  • In the box we discover several sales invoices with receipts for raw materials stapled to them which were not there when we originally had his records. All are to private householders (as opposed to his normal sub-contract work) and all appear to have been paid in cash.
  • A quick check indicates that he has done several "cash jobs" which he didnt disclose when we did the accounts/return and his tax liability has therefore been understated by circa £4k+.  Obviously this raises doubts in our minds about previous years too.
  • I tackle him about this, he demands that I return his records to him (no doubt intending to "lose" the documents he mistakenly gave us). Obviously I refuse. 
  • The next day he telephones again demanding his papers and saying that he has a "friend" who is an accountant and who will be taking over his affairs.
  • We then receive a hand delivered clearance letter (pushed through the door and not even in an envelope) demanding all his records, all our working papers, etc. from someone purporting to be an "accountant" but quoting no qualifications, and who does not appear on any institute membership list that I can find.
  • I write back politely pointing out that his new client owes a considerable bill, that our duty is to forward his prime records to HMRC as requested, and that he should know that he has no entitlement to our working papers.
  • Today another letter was hand delivered by this "accountant". It is highly offensive, it would be funny if it was not so infantile, and, it is also quite threatening in both tone and content.

What would your next move be?

Replies (59)

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By ShirleyM
13th Aug 2011 07:30

I would ....

... raise an invoice for any outstanding fees (for reviewing the accounts & dealing with HMRC?) and then inform the client his records will be returned when the fees are paid. You may consider it wise to copy the 'new' invoices before returning them.

Contact HMRC and inform them that the client has appointed another accountant. They will probably ask who the new accountant is and you will have to decide whether you provide this information. You also choose whether to tell them of the 'new' invoices.

Submit a SOCA report, and your problems are over.

I would be very happy to get rid of that client, and can't understand your reluctance to let him go. It shouldn't really matter to you whether the new 'accountant' is really an accountant, or not. It is the clients choice.

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By Cloudcounter
13th Aug 2011 10:17

Take advice

I agree with Shirly that the sooner that you get rid of this client the better.

You need to consider the position relating to the accounts that you have already submitted,  Have a look at your professional body's ethics code and guidance on this, or get in touch to ask for advice,  It may be that the code requires you to advise HMRC that you have found out that the accounts and tax return that you prepared cannot be relied on.

I'm not sure without looking how that fits in with self assessment, online filing and money laundering but it's worth looking at.  A pound to a penny that if HMRC does dig deep enough to find the true position, the client will be saying that he gave you everything and it must be your fault.

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By PennyC
13th Aug 2011 10:58

One point

I am in agreement with the above - ditch the client immediately, ensuring that he is billed for all work to date, and file a report to SOCA.

But as for "our duty is to forward his prime records to HMRC" - I disagree. The request for client records is made to the taxpayer, even where directed via the accountant. It is therefore the client's duty, not yours, to hand over his records - and if you do so against his instruction you may find yourself in difficulty. Of course, exercising a lien over those records will make it difficult for him to comply with HMRC's request, and you therefore have to be mindful of prejudicing the client's position by exercising such lien - if, for example, the taxpayer were to suffer penalties for failure to produce documents because of that lien you may find yourself liable. I would write to HMRC, explain that you are no longer acting for the client, explain what records you hold (so they are made aware that they exist) but advise that you are exercising a right of lien over those records. Once your fees are settled in full, the records will be returned to the client so that he may pass them to HMRC or his new agent.

That, I believe, is the professional way in which the matter should be handled.

One other point - as for "purporting to be an "accountant" but quoting no qualifications, and who does not appear on any institute membership list that I can find". So what? As you've said yourself many times, qualifications mean nothing, and there are plenty of excellent unqualified accountants out there. Posting a naked letter through the door is perhaps not the most professional manner, but it doesn't necessarily reflect the person's technical ability (though I understand your suspicion).

Also - I've no doubt this is not the first time this situation has arisen, and I'm pretty sure there others in a similar posiion right now, but if I were the client and/or new agent reading this, I might just be wondering if this post were about me (and therefore able to identify the author). As written, the details are rather obvious.

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By Top_Cat
13th Aug 2011 11:04

-

As regards the client, that is not a problem.  He simply managed to jump before he was pushed.

We will be notifying HMRC of our discovery and supplying them with full details including copies of the "missing" invoices.  I think the client would have great difficulty convincing anyone that he "gave us everything and it must be our fault" as yesterday he was proven to be a con-artist.  He had contacted HMRC claiming that we did not pass last years refund on to him and demanding that they pay it again. This was not a very bright allegation to make as our client bank statement clearly shows the refund coming in, and 3 days later it being transferred to his bank account minus our fee. Obviously a copy of the statement is being supplied to HMRC and we have pointed out that we consider this accusation by the client to be defamatory.

However, our main concern is this alleged firm of accountants. They are new to the area and this is our first contact with them. They style themselves as *******&*******LLP. They also claim to be chartered, but don't appear on the institutes list of members either as a firm or as individuals. 

My suspicions were raised by the rather bizzarre behaviour by them.

The first clearance request was hand delivered out of hours and pushed through the door, not even in an envelope. We quite reasonably responded stating that there were outstanding issues to be resolved and would contact them again shortly. Our letter contained a fascimile signature.   Yesterday we then had a further letter pushed through our door out of hours and the frankly infantile tone really causes concern. The opening paragraph of this second missive is -

"I am in receipt of your letter of 8th received 12th. Was this sent by 4th class post? "

it then continues - "However I am a little concerned that your letter was not signed, very unprofessional".

it then goes on to make various threats, and quite frankly, appears to be the ramblings of a child.  What we have discovered by googling their names is that the "partner" who wrote this letter apparently (according to their website) joined the firm straight from school 5 years ago as what they describe as an "apprentice", and "worked his way up to partner" - in 5 years ?

It seems that our first job on Monday will be to contact the Institute and our second task will be to send copies of eveything we have discovered to HMRC. Third task will be to file proceedings to recover our fees, and, to consider what action to take regarding the defamatory remarks made to HMRC.

 

 

 

 

 

 

 

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Replying to John McDuwell:
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By PennyC
13th Aug 2011 11:23

I still think

You need to deal with matters correctly and professionally.

You say the client has jumped before he was pushed. In which case he is no longer your client. You may make a report to SOCA but my view is that you should not hand over his records to HMRC (nor should you have any further direct communication with HMRC regarding his affairs). Regardless of any right of lien that you may want to exercise, they remain his records, not yours. As you have ceased to act for him, the correct action is for you to return them to the ex-client (after he has settled your fees and subject to the point above about prejudicing his position).

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Replying to Francois Badenhorst:
By ShirleyM
13th Aug 2011 11:46

Second hand information

You don't know what the client has said to his new accountant. The new accountant may be totally oblivious to the true position. Your ex-client could be portraying you as the worst accountant in living history, and whereas most accountants take these complaints with a healthy pinch of salt, it isn't guaranteed.

If the new accountants actions are upsetting or annoying you, either telephone him/her, or give them what they want and then you never have to communicate with them again.

Just applaud the fact that this client has left, put in a SOCA report to fulfil your obligations, and then leave HMRC to judge the situation and dish out the punishment.

I agree with PennyC that the records belong to your client, and you should be careful not to breach any laws. Any other actions may rebound on you, and may be seen as sour-grapes, or revenge.

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Me!
By nigelburge
13th Aug 2011 14:19

"We will be notifying HMRC of our discovery.....................

and supplying them with full details including copies of the "missing" invoices."

I hope you have the client's written consent to do this. If not, you may be laying yourself open to being dragged through the courts.

I don't know what your professional guidance is but the ICAEW state that the correct procedure is to write to HMRC and inform them that the previous tax returns submitted by you for this client can no longer be relied on. 

Penny's last post is spot-on.

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Replying to johnjenkins:
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By PennyC
13th Aug 2011 11:59

CIOT instructions are similar

The agent should advise HMRC that he has information indicating that certain statements cannot be relied upon - but only where the matters in question affect accounts or statements which carry a report signed by the member as to their accuracy, and then only if the terms of the engagement letter allow such disclosure.

Therefore, if we are talking only about a tax return, which is not based on accounts carrying the member's signature, such disclosure may not be appropriate.

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By Top_Cat
13th Aug 2011 13:13

-

 

Regardless of professional guidelines there is a common law duty to report and supply full details (& any evidence) of a crime. Defrauding HMRC is a crime.  Therefore regardless of professional guidelines there is a common law duty (any instruction or guidelines which restricts or changes obligations under the law renders those instructions /guidelines unlawful).

 

Whilst the actual records belong to the client, as stated by Penny, our file copies of those documents form a part of our working papers, which we are legally entitled to disclose to whoever we wish. Having made slanderous false allegations the client himself has opened the door for us to defend our position by whatever means we deem appropriate. Clearly evidence proving his allegation to be false is the obvious route, but, any further evidence which demonstrates his lack of veracity is also appropriate and specifically allowed in law.

 

However, as indicated in my previous post, the bizarre letter from the new "accountants", the rather strange behaviour in hand delivering letters (cant they afford a stamp?), and the claims on their website to be chartered whilst not being listed as members give more cause for concern.

Obviously a report to the institute of these apparently fraudulent claims of membership is vital.

 

 

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Replying to Old Greying Accountant:
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By PennyC
13th Aug 2011 13:40

Something doesn't add up

"there is a common law duty to report"

Which is why I and others have indicated that a report to SOCA would be in order, thus fulfilling your legal obligations.

"(any instruction or guidelines which restricts or changes obligations under the law renders those instructions /guidelines unlawful)"

I am sure that would be the case, but since CIOT's guidance starts off by saying that a member's primary duty is to ensure that his actions comply with the law, and also that the member has duties to the tax authorities etc, the presumption has to be that those guidelines are written in such a way so as to ensure that there is no restriction of the member's legal obligations. In particular, the statutory requirement to disclose details of criminal activity is addressed - through reports under the money-laundering regulations.

But this is where I am curious - we have become used to your rants over the years against HMRC, the clear message from which is that, particularly in the context of an enquiry, we should all be prepared to make HMRC's life as difficult as possible. But now it seems that you are suggesting that you would be prepared to voluntarily hand over your records even though there is as yet no legal obligation to do so (I'm assuming HMRC have not requested sight of your working papers) - apparently only to exact some form of revenge against your ex-client.

But in any event, you have clearly already made up your mind as to your course of action, so I'm not quite sure why you raised the question in the first place, or are you simply using AW to blow off some steam?

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By girlofwight
13th Aug 2011 13:29

Agree Penny
Alas I'd tend to agree with Penny and Neil.

I say alas as instinctively my wish would be to make a disclousre to HMRC but, bizarrely, I suspect, as suggested, Prof Assn rulebooks dont support this. I miss the old days of having a DI you could phone and have a quiet word with in such cases....

These days there is a need to play things "by the book", which to me seems a detriment when you have taxpayers blatantly on the fiddle.

Progress? Alas no...

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By ShirleyM
13th Aug 2011 14:53

I'm getting confused too

I would have thought you had seen this scenario many times before considering you have 40 years experience as an accountant & barrister.

I am also confused that you are now planning to give HMRC confidential information when there is no specific requirement to do so. You have commented frequently in the past that you would never make a report based on suspicion alone.

Do you have proof that the client, and his new accountant, are not going to disclose the correct sales figure?

 

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By Top_Cat
13th Aug 2011 16:32

-

 

Penny - whilst advocating defending clients by all (legal) means possible, I have never advocated defending a client or ex client who has blatantly lied both to HMRC and to his accountant.

 

Shirley - Do you think a firm apparently falsely claiming to be chartered and writing quite infantile letters is likely to make disclosure?  As I stated earlier, it is the frankly bizarre behaviour of this "accountant" which concerns me.

 Evidence of a crime does not qualify as confidential (with the exception of legal privalege which does not apply in this case). This report is not based on "suspicion" but on hard evidence which is absolute proof that substantial amounts of work was carried out and deliberately concealed and not declared.  

 

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By PennyC
13th Aug 2011 16:57

No-one is suggesting that you defend a delinquent client

But your initial post questioned what other members would do next.

In the case of the client, the clear advice has been pretty unanimous - file a report to SOCA, thereby discharging your legal obligations. Let HMRC worry about bringing him to book, he's no longer your problem. End of story, so why make additional work for yourself, and risk facing a challenge (successful or not, but nevertheless requiring a defence) of making unauthorised disclosure to HMRC?

If you don't like the advice, and insist on taking action that you are not obliged to, I don't know why you bothered asking in the first place. To pursue this matter in the manner suggested simply indicates a particular mentality that is alien to many here.

As far as 'outing' the new agent, that's a matter for you and your conscience - I don't think anyone here is in a position to tell you what you should and should not do in that regard. Some would no doubt pursue it to the nth degree, others would let it go and get on with more constructive matters.

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By ShirleyM
13th Aug 2011 17:06

It's your call, but beware

I am a cautious person. You cannot possibly have absolute proof that the firm is not chartered. The ICAEW website may be incorrect! I agree that it is unlikely, but you would be very unwise to go around making accusations based on possibilities and percentages.

In any case, if a person commits one deception, you cannot make the assumption that everything they do is a deception. Can you?

I don't understand why simply informing HMRC that the return prepared by you should not be relied upon, and also submitting a SOCA report, isn't fulfilling your obligations. Why do you think you need to do more?

It's sounding more and more like a vendetta!

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By PennyC
13th Aug 2011 18:04

Further

Where is the "absolute proof" that the cash takings were deliberately concealed? Yes, there may have been an underdeclaration, yes it may be considered deliberate (the taxpayer signed his tax return presumably in the knowledge that he he had not returned all income - or is there any chance at all that he simply forgot to enclose those records originally?) but has he attempted to conceal the fact?

For starters, he has obviously made no attempt to destroy the paperwork - which anyone trying to cover their tracks would surely do. Only you know the nature of this taxpayer, but again you have made an assumption that he has asked for his records back only so that he can 'lose' them. Unless he told you that was exactly what he ws going to do, then your suspicion is exactly that - suspicion. It is also implicit in your comments that he let you see the 'missing' paperwork in error - unless he confessed to that, it is again nothing more than an assumption on your part.

I think Shirley has hit the nail on the head.

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By Top_Cat
13th Aug 2011 18:47

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Clearly you are missing (or ignoring) facts. As I originally stated he demanded the return of the undisclosed sales records and made it clear that he was not prepared to disclose them.  His subsequent rather pathetic but nevertheless slanderous accusations obviously have a further bearing on this.

The "absolute proof" is the invoices /receipts neither of which were disclosed to us originally. This is supported by the fact that the material purchases (receipts stapled to the invoices) were also made by cash even from suppliers where he has charged "normal" purchases to his account. In total about £30k of turnover & £10k of expenses have been made in cash and not disclosed to us. This is then yet further compounded by the fact that none of the £20k profit has been banked.  Given that these figures double his turnover for the year it is untenable to claim that he didn't know when signing his return.

I don't think there is the slightest room for doubt that this amount of trading was deliberately concealed by him.

 

As regards the new "accountant". There is no doubt that they claim to be chartered - it says so on their website.  There is no doubt that they don't appear on the ICAEW list. One 'phone call on Monday morning will confirm that for definite.

 

In my post timed 11.04 I gave a couple of quotes from their rather bizarre letter. Would you expect such a letter from a professional person, or indeed a QBE ?

 

As regards merely discharging our legal obligation, that would be our usual course. However, when subjected to astounding slanderous claims made to HMRC then we have, I believe, every right (and indeed a duty to ourselves) to fully defend ourselves against such slander.

 

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Replying to Duncan Cameron:
By gerrysims
13th Aug 2011 19:26

all a bit circular now

Top Cat, I think you are letting your feelings rule your head a bit here. You really could push yourself into problems if you don't take time to consider what has been advised.

There clearly are steps you need to take to address the issues that concern you but you need to separate them and decide on a course of action appropriate to each concern, separately.

If it were me I would :

1. Bill the client to date, including preparation of handover information and send that to him with a note explaining that this information and his client records will be handed over on payment of that invoice.

2. File a SOCA report to cover your concerns of fraud.

3. Inform HMRC that previously submitted accounts (if any have been filed) and tax return(s) cannot be relied upon and that you no longer act for the client. Explain the lien over records too.

4. Contact the ICAEW to point out your concerns over the firm who hold themselves out as Chartered.

5. You may wish to copy HMRC your client account bank statement showing the onward payment of the tax refund although personally I would put this down to hot air on the part of the client until I was actually challenged over it.

This is as advised by previous posters. I would not send client records or further communicate with HMRC about this clients affairs now that you have been dis-instructed unless forced to do so by law. I do not believe you have yet been forced to do so but that may arise as a result of your SOCA report I guess.

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Replying to Duncan Cameron:
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By PennyC
13th Aug 2011 19:44

Last thoughts

Top_Cat wrote:

Clearly you are missing (or ignoring) facts.

'Missing' is more accurate - since we can only rely on your version of events, we cannot possibly know if we are in possession of all the facts.

As I originally stated he demanded the return of the undisclosed sales records and made it clear that he was not prepared to disclose them. 

I cannot see anything in the OP where you or he made it clear that he was not prepared to disclose them - all that you said was that he demanded their return.

The "absolute proof" is the invoices /receipts neither of which were disclosed to us originally. This is supported by the fact that the material purchases (receipts stapled to the invoices) were also made by cash even from suppliers where he has charged "normal" purchases to his account. In total about £30k of turnover & £10k of expenses have been made in cash and not disclosed to us. This is then yet further compounded by the fact that none of the £20k profit has been banked.  Given that these figures double his turnover for the year it is untenable to claim that he didn't know when signing his return.

I don't think there is the slightest room for doubt that this amount of trading was deliberately concealed by him.

I would accept that he may have signed his return in the knowledge that it was incomplete - I've already said that, and therefore accept that the understatement may have been deliberate. But concealment is another matter, and "the person has to take active steps to cover their tracks by making arrangements to conceal the fact". Examples would be creating false invoices or destroying records. Of course, were he to have 'lost' the invoices - as you assumed he would - then that may well have led to a charge of concealment. But the mere fact that he has left income off his return, and knew about it, does not constitute concealment. I'm not convinced that there is an offence of 'intended concealment'. I would have thought that you of all people ought to understand the distinction.

As regards the new "accountant". There is no doubt that they claim to be chartered - it says so on their website.  There is no doubt that they don't appear on the ICAEW list. One 'phone call on Monday morning will confirm that for definite.

Which is all that Shirley was suggesting - be absolutely certain of the facts before jumping to conclusions.

In my post timed 11.04 I gave a couple of quotes from their rather bizarre letter. Would you expect such a letter from a professional person, or indeed a QBE ?

Probably not, but as I said earlier, what you decide to do in relation to the new agent is entirely up to you - some would pursue, others wouldn't waste the time and effort.

However, when subjected to astounding slanderous claims made to HMRC then we have, I believe, every right (and indeed a duty to ourselves) to fully defend ourselves against such slander.

Of course you do, but don't confuse the defence of yourself with your legal obligations in respect of the (ex)-client's tax affairs. The two are quite separate, and divulging information to HMRC, when you have no obligation to do so, simply to get back at the client has nothing to do with a defence of your reputation.

But back to the point - you asked a question, it's been answered several times and you don't appear to like the answer. There's no point in trying to justify, or seek support for, your proposed actions - the proper, professional, steps have been set out for you. It's now up to you and your conscience as to how you proceed. I think I've wasted enough time on this topic now, and have nothing further to add.

 

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By ShirleyM
13th Aug 2011 19:24

You are the barrister here .....

I'd drag the client into court and get massive compensation for his slander. I'd have a go at the new accountants, too. You should be able to get them on soliciting (of your clients) and false representation. At least you won't have to pay extortionate legal fees as you can DIY. I am sure Flash will provide protection if they turn nasty (well, you never know what these dirty criminal types will do next!). 

OK - lets get serious again. I think you are looking for fault, and somehow justifying it all to yourself. It maybe that this client is just thick, but would he have given you the 'new' invoices if he was going to conceal them? Of course not! He would have removed them again, and denied any allegation of concealing private sales. All the rest is assumption and suspicion.

Maybe your reaction to the client was OTT, and he is beating a hasty retreat to safe sanctuary.

As PennyC says, you have already made the decision. Do you want our blessing?

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By Top_Cat
13th Aug 2011 19:48

Actions so far -

1. Bill the client to date, including preparation of handover information and send that to him with a note explaining that this information and his client records will be handed over on payment of that invoice.  DONE.

2. File a SOCA report to cover your concerns of fraud. DONE

3. Inform HMRC that previously submitted accounts (if any have been filed) and tax return(s) cannot be relied upon and that you no longer act for the client. Explain the lien over records too. DONE (well it will be when they get round to opening their post - which we all know can take weeks)

4. Contact the ICAEW to point out your concerns over the firm who hold themselves out as Chartered. That will be done on Monday. Either they are holding themselves out to be qualified when they are not, or, if they actually are qualified tyhen an immediate complaint will be made regarding their offensive and highly unprofessional letters.

5. You may wish to copy HMRC your client account bank statement showing the onward payment of the tax refund although personally I would put this down to hot air on the part of the client until I was actually challenged over it. We found out about this because HMRC contacted us regarding the allegation. Defamation proceedings are a waste as the client's house wouldnt even cover the costs, but we will seek an immediate injunction.

This is as advised by previous posters. I would not send client records or further communicate with HMRC about this clients affairs now that you have been dis-instructed unless forced to do so by law. I do not believe you have yet been forced to do so but that may arise as a result of your SOCA report I guess.      Th There seems to be some confusion by members between the legal requirements under money laundering regulations (which you can be prosecuted for not following), and, the requirements under common law to report a crime (which you can be jailed for failing to do).

Of particular concern where defrauding the revenue or concealing income is concerned are the potential provisions of the Terrorism Act s19(2).  Also under the Theft Act where a deception can be committed by ommission. It could, and indeed has often, been argued that by failing to report a theft the party is guilty of aiding and abetting in the concealment of a crime.

 

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Replying to Nida Hassan:
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By PennyC
13th Aug 2011 20:38

OK - final, final words

There seems to be some confusion by members between the legal requirements under money laundering regulations (which you can be prosecuted for not following), and, the requirements under common law to report a crime (which you can be jailed for failing to do

 

No confusion - I defer to the superior legal knowledge of the barrister, but surely if one is reporting a crime other than through SOCA one does so to the Police, not to any other party (in this case, HMRC?). If I saw my neighbour's house being broken into, my first call would be the Police. I may, out of neighbourly courtesy but no obligation, call my neighbours and ruin thier holiday. But that is at my discretion.

So, if you really are concerned about a jail sentence for failure to report, I suggest that you go down to your local cop shop and ask to file a report. You'll have satisfied your legal obligations, but I'd love to see the desk sergeant's reaction!

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By BKD
13th Aug 2011 20:21

I agree entirely

With the analyses of Shirley, Penny and Gerry (whose advice in particular is concise, to the point and spot on in every respect)

 

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By ShirleyM
13th Aug 2011 20:54

OK - my final words too

There seems to be some confusion by members between the legal requirements under money laundering regulations (which you can be prosecuted for not following), and, the requirements under common law to report a crime (which you can be jailed for failing to do

Has there been a crime, or just a suspicion of crime? Your reasoning is not based on actual proof, but on a mixture of possibly misunderstood events, and assumptions.

What happened to 'innocent until proven guilty'? 

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By Top_Cat
13th Aug 2011 22:35

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Penny - where the crime is one of defrauding the Revenue then HMRC is the correct body to which a report should be made. In fact the4 correct department to report it to is the specialised team at -

HM Revenue & Customs
Albert Bridge House
1 Bridge Street
Manchester
M60 9DX 

The police are not the right people to report tax evasion to, and would simply refer you to the above without bothering to take any details.

 

Shirley - Even a defence lawyer has to accept that in some cases the evidence is overwhelming and beyond dispute. The fact that the client withheld information, and we are not talking here about one invoice accidently mislaid, but a whole pile of invoices and receipts,plus the fact that none of the cash was banked, plus the fact that the associated purchases (and ONLY these purchases) were made for cash despite the client having regularly used credit accounts at the suppliers, plus the demand for the return of the papers the instant he was confronted, really is overwhelming.  By signing the Return knowing it to be false he committed a crime.

 

[removed by mod]

 

Penny & Shirley - I find your silence on the content & tone of the new "accountants" letter interesting. Am I to take it that you consider it acceptable for a professional to write offensive letters and to behave in such an unprofessional manner?  Perhaps the standards you expect are different to those I expect?

 

 

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Replying to DotasScandalDotOrg:
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By PennyC
14th Aug 2011 09:28

Getting back to the point - if there is one

You asked what other members would do, we've told you. Or was the purpose of your OP to tell us what you think we ought to do?

If you feel inclined to report the alleged crime directly to HMRC, go ahead and do so (which is a quite a different matter to handing over records to the enquiry Inspector). Personally, I would not do so, since the Tax Evasion Hotline was set up to give the public and the business community - not professional agents - the opportunity to report tax misdemeanours. I would follow the instructions of my professional body, which are to report suspected criminal activity to SOCA. (I suspect, though may be wrong, that a tax adviser making a report to the TEH would simply be told to make a report to SOCA.) If the circumstances were severe enough I might consider taking competent legal advice (again in accordance with CIOT guidance) as to whether I should take any further steps, but I certainly don't think this case, from what we have been told, would merit that. Put it another way, I've made several reports to SOCA - at least two of which were followed up - and am still waiting for the Procurator Fiscal to start proceedings against me for failing to report the crimes elsewhere.

I haven't been 'silent' on the new accountant - what I would do would depend entirely on the exact circumstances. As Shirley says, we only know part of the story. Of course I do not find it acceptable for a professional to write letters that fall below professional standards. But that does not mean that I need to get on my high horse and rant about it on an internet forum every time I come across such activity. Like Shirley, I've come across my fair share of unprofessioanl behaviour, some of which I have acted on, some of which I ahve ignored as not being worth the hassle. What each and every individual does will depend on the whole facts of the case (and sometimes which side of the bed they got out of in the morning).

Perhaps David Winch, if he comes across this thread, would like to give us his expert thoughts?

 

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Replying to Caber Feidh:
Me!
By nigelburge
14th Aug 2011 14:57

Penny has the nail on the head here.

PennyC wrote:

You asked what other members would do, we've told you.

This rather reminds me of some of [member name removed] posts. Asks for the opinions of forum members, doesn't like the answers, does what he was going to do in the first place and them tries to justify himself at great length to the forum.

Perhaps we should have special "ranting and letting off steam" forum and we would then all know that no reply is required or advice requested.

PennyC wrote:

Perhaps David Winch, if he comes across this thread, would like to give us his expert thoughts?

I too would be interested in what David has to say.

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By ShirleyM
14th Aug 2011 08:46

Please - no recriminations - I gave my view, as asked

"Shirley - Even a defence lawyer has to accept that in some cases the evidence is overwhelming and beyond dispute."

In the past, you have said that nobody is guilty until a court says so, and until that happens they are innocent. If it never goes to court, then they cannot be considered guilty, therefore have never committed a crime. Have you misled us, or omitted something relevant? I am quoting your own guidance!

"Penny & Shirley - I find your silence on the content & tone of the new "accountants" letter interesting. Am I to take it that you consider it acceptable for a professional to write offensive letters and to behave in such an unprofessional manner?  Perhaps the standards you expect are different to those I expect?"

I have seen, and experienced, a lot of offensive comments, and unprofessional manners, by accountants on here. Far worse than the mildly amusing comments you have quoted from the letters you received. I suppose I have been conditioned to accept this as normal behaviour and almost expect it. So maybe you do have different standards of expectation in that you think it's ok for some, but not for others.

I don't want to nitpick and get into an argument, but you need to make your mind up whether you stand by what you have said in the past, or not. You can hardly blame people for struggling to comprehend the complete 'about face' that you are demonstrating here.

EDIT: I've edited my post a little to clarify some comments. If you address any further comments to me I will not respond, as I wish to exit this thread, as noted earlier.

 

 

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By Top_Cat
14th Aug 2011 09:47

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"Shirley - Even a defence lawyer has to accept that in some cases the evidence is overwhelming and beyond dispute."

In the past, you have said that nobody is guilty until a court says so, and until that happens they are innocent. If it never goes to court, then they cannot be considered guilty, therefore have never committed a crime. Have you misled us, or omitted something relevant? I am quoting your own guidance!"

 

 

You are missing the simple point that where it is obvious to you that a person is guilty then if they insist upon pleading not guilty you cannot properly represent them and must ethically decline to do so.

In an extreme case where no one will act, then of course the court can select a barrister and order them to act.  (I am not aware that this situation has ever arisen in a British court.)

In the case of our ex client, I would be happy to prosecute were it not for the fact that I am a material witness.

What you seem to be missing is that before anyone is taken to court the crime first has to be reported, evidence gathered (which I have gathered), and the evidence put to the accused. Anyone knowing a crme has been committed (particularly crimes against the state) who does not report it AND bring clear evidence to the attention of the relevent body, risks being prosecuted themselves as they are, effectively, aiding in the concealment of a crime.

This is not like the rather obscure cases often seen on here of HMRC making wild assumptions based on not very much.

 

As for unprofessional comments - in the heat of a discussion in a forum of course that will happen. However, in a clearance request made to someone you have never dealt with, have no knowledge of, and no possible reason to insult, then such coments are pure ignorance.

 

The issue of whether or not they are indeed qualified will be addressed tomorrow although the evidence leads me to suggest that the odds are 10-1 that they are not qualified.

 

 

 

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By Top_Cat
14th Aug 2011 10:01

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PennyC  -  (I suspect, though may be wrong, that a tax adviser making a report to the TEH would simply be told to make a report to SOCA.)"

 

 

Actually they will themselves pass it to SOCA, but, will also make their own investigations. There seems to be some confusion over the status of copies of documentation. Copies are not prime records and as such do not belong to the client. However, where those copies provide proof of an offence they do become evidence, they are not covered by professional privalege, and there is a common law duty on every citizen to volunteer evidence of a crime to the relevent prosecuting authority (in this case HMRC).

 

  

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By PennyC
14th Aug 2011 14:03

Penny has the nail on the head here.

Only for Nigel to hammer it home

So let's close this off.

We'll need to agree to disagree over the reporting obligations in respect of the client. But you (Top_Cat) seem to have a clear idea as to what those legal obligations are (I should certainly hope, as an accountant and barrister of some 40 years, that would be the case). That being so, despite the advice and opinion to the contrary, why don't you just do what you think you are legally required to - there's no need to come here asking for advice and opinion if you're just going to ignore, or argue, about it.

As for the new accountant, if you really want constructive advice, I would want to speak to the (ex)client and see full copies of all correspondence from the new agent. Only then could I offer an informed opinion as to what I would consider doing next.

 

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By Top_Cat
14th Aug 2011 14:09

Correction

nigelburge - "This rather reminds me of some of [member name removed] posts. Asks for the opinions of forum members, doesn't like the answers, does what he was going to do in the first place and them tries to justify himself at great length to the forum."

 

Actually if you read the original post the details of the background were exactly that, merely background. However it is concerning that so many members mistakenly seem to believe that filing a money laundering report exempts them from the requirements placed on every citizen. More concerning is the view that they seem to think that concealing evidence of a crime or not voluntarily disclosing copies of evidence is "acceptable". As has been often stated accountants enjoy no legal privalege whatsoever regarding their client's affairs.

However, although ignored by many posters, the main point of the post was to guage other members views of what is best described as an infantile and offensive request for clearance and the bizarre way in which it was delivered.  Again, it is disappointing, and somewhat revealing, to discover that so many members seem to think this is in some way acceptable. Perhaps a sad reflection of the current standards in the profession.

 

  

 

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Replying to David_F:
By gerrysims
14th Aug 2011 14:20

ignored ?

Top_Cat wrote:

However, although ignored by many posters, the main point of the post was to guage other members views of what is best described as an infantile and offensive request for clearance and the bizarre way in which it was delivered.  Again, it is disappointing, and somewhat revealing, to discover that so many members seem to think this is in some way acceptable. Perhaps a sad reflection of the current standards in the profession.

 

I don't think this point has been ignored, it's just that you don't agree with what others have said.

And I also don't accept that others have said the letters you have received are 'acceptable'. Just that they don't advise any further action beyond contacting ICAEW regarding holding themselves out as Chartered. It's for you to decide if you want to go further but you asked what we would do not what we thought was acceptable.

I'm also hoping David Winch picks up on this as I'm interested to know if what I propose would be accetable legally.

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Replying to David_F:
Me!
By nigelburge
14th Aug 2011 15:57

No, it is not "acceptable" in any shape or form

Top_Cat wrote:

Again, it is disappointing, and somewhat revealing, to discover that so many members seem to think this is in some way acceptable. Perhaps a sad reflection of the current standards in the profession.

but given the huge variations in people who call themselves "accountants", it is only to be expected that we will all see some really loony ones from time to time. I am sure that we all have too.

I have had some and to be honest, they have just given me a jolly good laugh. Treat them in return as professionally as anyone else, mentally stick one or two fingers up at them (as the fancy takes you) and forget about them even if they do make silly threats and libellous statements. Life is really far too short to waste time even thinking about it.

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Replying to David_F:
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By PennyC
14th Aug 2011 15:27

Please

Stop twisting the words of others to suit your own agenda.

I'm well aware of the MLR requirements, as I am of a duty to report crime. However, I remain of the opinion that in the circumstances of your case a report to SOCA would fulfil both obligations. You may well tell me that I am wrong and that there is a risk still of my being prosecuted for faling to make a separate reporrt to HMRC (or the Police). Well, I've assessed that risk, and consider it to be low enough to not worry about. Others may be more risk-adverse, and take a more cautious approach and I wouldn't crticise them for doing so. But as Nigel pointed out - you did not ask what was the correct thing to do - you asked what others would do. We've told you, you can tell us that we're all wrong, but it won't change the answer to your question so why harp on about it?

But where you've really twisted words is in the comments regarding the new accountant. None of us (well not me, at any rate) are condoning less than professional behaviour. For the avoidance of doubt, I do not consider it acceptable, but any course of action would depend on the facts. But as I clearly pointed out, I would want a great deal more information before deciding whether this was something I should waste time over, and therefore being in a position to tell you what I would do. Your comments about responses being "revealing" and a "sad reflection" of current standards are absurd in the extreme. It is clear that you are now beyond a rational discussion on the matter, and have again gone down your usual route of criticising, en masse, those whose views appear in your mind to differ from your own, so this is indeed my last comment on this thread. You're welcome to the last word, I shall not be responding.

 

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By Top_Cat
14th Aug 2011 15:54

-

PennyC - "It is clear that you are now beyond a rational discussion on the matter, and have again gone down your usual route of criticising, en masse, those whose views appear in your mind to differ from your own, "

 

[comment removed by mod]

At no point have I insulted you, or made accusations. Whilst I might consider some of your comments absurd, I have had the manners not to say so.

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Me!
By nigelburge
14th Aug 2011 16:05

Have I......

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I shall follow Penny's excellent example and this will be my last comment on this thread.

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By jaybee661
14th Aug 2011 16:59

... just a quick comment...

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By Peter Bonetti
14th Aug 2011 17:00

David Winch

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Replying to Andy Davis:
By ShirleyM
14th Aug 2011 17:26

Please - Let's not return to threads getting deleted

Most contributers have stayed reasonably convivial (and I am NOT singling out any one person as being otherwise).

It would be a shame for this thread to deteriorate and get pulled. Hopefully, David will come along to give his expert opinion, but this won't happen if the thread gets pulled. I would be very interested to hear Davids view of our obligations, as others have commented before me.

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By Top_Cat
14th Aug 2011 18:32

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bike
By FirstTab
14th Aug 2011 18:36

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By frankie
14th Aug 2011 18:37

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By jaybee661
14th Aug 2011 18:41

... chuckle chuckle...

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Replying to tonycourt:
By frankie
14th Aug 2011 19:18

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By twickers
14th Aug 2011 19:07

rudest clearance

Fascinating / like reading a Miss Marple thriller / who is the guilty party/ and who is the mystery new agent./ and why are fees o/s when client refund paid direct to agent.

I suspect Penny and Shirley will find the culprit.

This post is also something akin to 24 hour news/ constant repeats.

 

 

 

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By ShirleyM
14th Aug 2011 19:31

@twickers

 

twickers PM | Sun, 14/08/2011 - 19:07 | Permalink

Fascinating / like reading a Miss Marple thriller / who is the guilty party/ and who is the mystery new agent./ and why are fees o/s when client refund paid direct to agent.

I suspect Penny and Shirley will find the culprit.

Thanks twickers ... but I'll quote OGA here and say I'm rapidly losing the will to live! Where's Flash when you need him? The AWeb universe needs saving!

 

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By Mouse007
14th Aug 2011 20:41

Breaching confidentiality

Under ICAEW guidance (which broadly follows common law principals) there are three scenarios when you can breach the duty of confidentiality:

a) legal requirement (eg under MLR to SOCA)
b) in the public interest
c) to defend yourself

I think everyone agrees that a) is covered and a report to SOCA is required. I’m not however aware of any Acts of Parliament which specifically require disclosure to HMRC, that obligation (if there is one) perhaps therefore comes under b).

b) is difficult because it can be subjective. Something which appears to be in the public interest to one may not be so to another. That, I suspect, is causing the problem in this thread.

There is a fine balance to be struck between your (ex) client’s interests and the public interest. There are quite a few things to take into consideration and ICAEW members should give consideration to allowing the client an opportunity to correct matters themselves. You may claim to have already done so, but was it communicated clearly enough? You may say yes, but if he says no, then what?

It is worth noting that ICAEW guidance specifically states “a member should not provide HMRC with an explanation as to the reasons for ceasing to act” after some discussion when a client refuses to disclose.

Is it in the “public interest” to immediately rush off and report matters to HMRC? Is there not something else that you should be doing first?

To avoid disciplinary proceedings relating to breach of duty of confidentiality you need to be able to show you had an honest and reasonable belief that, the disclosure was made in the public interest (to a proper authority).

c) clearly allows you to supply your client account bank statement showing transactions, and copy invoice, to disprove allegation. Again be wary of the guidance which restricts you from any further disclosures.
 

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By jaybee661
14th Aug 2011 21:31

... chuckle chuckle...

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Replying to shaka198:
By frankie
14th Aug 2011 22:43

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