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Unqualified accountants filing SATR, VAT returns etc for clients

Unqualified accountants filing SATR, VAT...

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I would be the first to admit I am still inexperienced and learning my trade, however, I have taken and passes my ACA with ICAEW and am now a qualified Chartered Accountant with a Practicing Certificate. The shortfalls in my knowledge come from having qualified with a large firm of accountants and specialised in audit work and corporation tax to date I am now slowly building a practice specialising in small businesses and personal tax returns. I am doing it slowly so I can assimilate the extra skills needed for this type of work.

I have just started to recruit staff for the first time; I am looking for part time staff with experience of bookkeeping, payroll and VAT.

I have been very surprised, however, by the number of applicants who have been preparing and filing SATR's, VAT returns and RTI for clients even though they have no qualifications at all (except as one applicant put it QBE qualified ie "qualified by experience").

Is it legally OK for unqualified accountants to be doing this sort of work on their own and unsupervised?

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By James Reeves
26th May 2015 16:20

Absolutely fine.

The only requirement is that they must be registered for Money Laundering. Provided they have done that (and follow the relevant MLR procedures) they can do any or all of the above.

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Out of my mind
By runningmate
26th May 2015 16:30

"Accountant"

Anybody can describe themselves as an "accountant" & can prepare & submit tax returns to HMRC.  The term "accountant" is not protected in the way that terms such as "solicitor" or "dentist" are.

However, as mentioned by the previous poster, anybody providing accountancy / tax services to third parties for fees needs their compliance with MLR 2007 to be supervised by a supervisory body.  Supervisory bodies include ICAEW, ACCA, HMRC, etc.

RM

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By Tim Vane
26th May 2015 16:31

Although there is nothing new about unqualified accountants doing all of the work you mention, it is becoming increasingly common, for a number of reasons. Many "qualified" accountants are also giving up membership of their respective institutes and associations in order to compete in a market which is rapidly becoming a race to the bottom.

Aside from the MLR registration mentioned above (a couple of hundred quid for the first year) the abundance of free and cheap software means that the "profession" (for want of a better term) has extremely low barriers to entry. 

You can become a legitimate and productive agent and tax adviser for less than the cost of a good smart phone.

Of course, whether you will be any good is another matter entirely. But if the price is right, the punter won't really care.

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By qhas
26th May 2015 18:35

My sentiments precisely

Tim Vane wrote:

Although there is nothing new about unqualified accountants doing all of the work you mention, it is becoming increasingly common, for a number of reasons. Many "qualified" accountants are also giving up membership of their respective institutes and associations in order to compete in a market which is rapidly becoming a race to the bottom.

Aside from the MLR registration mentioned above (a couple of hundred quid for the first year) the abundance of free and cheap software means that the "profession" (for want of a better term) has extremely low barriers to entry. 

You can become a legitimate and productive agent and tax adviser for less than the cost of a good smart phone.

Of course, whether you will be any good is another matter entirely. But if the price is right, the punter won't really care.

refer my recent posting re the Indian Takeaway Jonnie
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By taxguru
26th May 2015 17:18

@OP - Watchout..... the plumber that did some odd jobs at your house last time may be filing off a few tax returns in the evening!!!!

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Basset Hound
By Cuchulainn
26th May 2015 17:28

Truth is stranger than fiction......

taxguru wrote:

@OP - Watchout..... the plumber that did some odd jobs at your house last time may be filing off a few tax returns in the evening!!!!

 

One of my competitors in a nearby town also happens to be a postman :-)

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By qhas
26th May 2015 18:39

I trump you

Cuchulainn] <p>[quote=taxguru wrote:

@OP - Watchout..... the plumber that did some odd jobs at your house last time may be filing off a few tax returns in the evening!!!!

 

One of my competitors in a nearby town also happens to be a postman :-)

[/quote, mine's the local Indian Takeaway Delivery driver.

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By arthurallan
26th May 2015 17:24

As well as registering for MLR should these "unqualified" accountants also obtain PII cover or is there no need for them to that as they are NOT technically "professionals".

Almost seems to put qualified professionals at a disadvantage as I guess we could be sued in situations where maybe the unqualified accountants can't be sued if they are not holding themselves out as "qualified professionals".

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Hallerud at Easter
By DJKL
26th May 2015 18:34

Professional

arthurallan wrote:

As well as registering for MLR should these "unqualified" accountants also obtain PII cover or is there no need for them to that as they are NOT technically "professionals".

Almost seems to put qualified professionals at a disadvantage as I guess we could be sued in situations where maybe the unqualified accountants can't be sued if they are not holding themselves out as "qualified professionals".

Surely the definition of professional is offering a competent service and not offering advice/working in an area outwith one's competence?

I may be reading more than deserved into your use of inverted commas and capitals, but given you indicate some experience with corporation tax within your mainly audit training to become an ACA ( I also trained with a larger firm, now part of Baker Tilly),  and  presuming you sat some tax exams, how does your "history" square with the undernoted question you asked previously?

 

Corporation Tax disallowed entertaining Posted by arthurallan PM | on Tue, 05/05/2015 - 17:48  764  9 comments | report printMore social links   Linkedin Google+ 

If a limited company makes a loss of say £5,000 but included in that loss is £800 of disallowable entertaining which reduced the loss to £4,200.

Does the company have to pay 20% CT on the £800 that has been disallowed? Or does the fact that there is still a loss of £4,200 mean there is no CT to pay?

_________________________________________________________________________________________________

 

 

Now, I am not qualified, I did not complete my apprenticeship, however nearly thirty years ago I sat  some of  the old ICAS exams and frankly I cannot see how you qualified with such a limited understanding of corporation tax? (Tax computations re UK source profits  would have been covered in the old ICAS first year Part I Taxation paper if not within the old Prelim Tax paper one took  about 8 weeks after starting the training contract)

Accordingly, as an unqualified ,who will have worked  in practice/industry for thirty years on 25 August 2015, who does carry PII insurance etc, maybe I ought to ask the question; what makes you think you are "Professional" enough to offer services to clients?

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By mrme89
26th May 2015 17:28

PII is advisable but not compulsory for an unqualified.

 

Of course they can be sued. They might not be holding themselves out to be qualified, but they are holding themselves out to be professionals.

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By Tosie
26th May 2015 17:37

My competitor

I have received acknowledgements  for several tax returns that I have not submitted. It appears that a former client is now completing his mates returns on line ,(what could be easier !!)

 These clients are sub contractors and have received much larger refunds than I would have  obtained for them. 

Beauty of it is that the suspect is semi literate.

 

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By qhas
26th May 2015 18:45

As Tim Vane said

Tosie wrote:

I have received acknowledgements  for several tax returns that I have not submitted. It appears that a former client is now completing his mates returns on line ,(what could be easier !!)

 These clients are sub contractors and have received much larger refunds than I would have  obtained for them. 

Beauty of it is that the suspect is semi literate.

 

it is a race to the bottom. Why bother qualifying?
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By GrayMan
26th May 2015 20:03

Unqualified persons filling in vat returns

An unlimited business can file it's own accounts, tax computations and all statutory returns. The tax & vat office may initially want to satisfy themselves as to the accuracy of the records kept and the competence of the person carrying out the work, prior to acceptance. 
Only limited companies or limited partnerships need an audit which means their accounts must be prepared by a Chartered or Certified accountant. This is because the company's directors or owners cannot be made bankrupt for the failure of the company. Even so, much of the audit work will be carried out by the accountants staff most of whom will be unqualified.

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By Tim Vane
26th May 2015 20:34

Audit?

Turnover has to be more than £6.5million before an audit is required, so nearly all limited companies don't need audits either and can be filed by anybody.

And a fairly large proportion of qualified accountants aren't registered to audit anyway, so it's not really relevant to the topic in hand.

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By GrayMan
27th May 2015 10:21

Audit

I agree, unless the articles of association state otherwise, it is not a public company and various other factors.

The only reason I mentioned it was that he states he specialised on audit work before qualifying himself.

When I worked for a Chartered Accountants accounts were often initially prepared by "means test" method or

from "shoe box" records, which together with an acquired line of questioning for incomplete records enabled us

to finalise accounts.

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Teignmouth
By Paul Scholes
26th May 2015 21:55

@arthurallan

I'd be interested to know what guidance and training the ICAEW gave you to enable you to go into practice?  As you can see from the responses above the world of accountancy & tax compliance has come along way in the past 20-30 years and I'm surprised that you were not prepared for the "real world".

Even when I qualified in the 70s, I had received most of my tax and accountancy in-house training from an "unqualified" accountant but, yes, it was still the case that most accounts and tax returns were prepared by accountants, and it was usual for them to be "qualified" firms.

40 years on, most compliance work can be done by the person or business, so there is no longer an assumption that an accountant will get involved, qualified or unqualified, and given the comparison of you and DJKL above, even these definitions are now pretty irrelevant in most accounts and tax work that goes on.

So when looking for people to help, go for experience.

BTW @Tim Vane - not all accountants give up their qualification in order to compete in a race to the bottom.  I gave mine up as my regulatory body was on a different planet to me and to save £600 I didn't need to spend any more.

 

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By Duhamel
26th May 2015 22:09

Tax return coach
Ever heard of a tax return coach? I discovered it yesterday. Must be a way around MLR or professional responsibilities. They don't do your return but help you do it yourself.

HMRC intend to divide advisers, I'm beginning to see an upside. Increased scrutiny of these 'advisers' is probably the only way the public will see the difference.

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Teignmouth
By Paul Scholes
26th May 2015 23:06

This is not uncommon

There are charities & the CAB that will help you prepare your tax return, as well as friends & family (in particular for the elderly).  Even I help a couple of clients do their own and intend to encourage others to do the same.  If a client can do 95% of their books & payroll a 3 entry SATR should not be beyond their abilities.

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By Duhamel
26th May 2015 23:36

Disagree
I think it is uncommon for this to be an entire for profit business model.

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By ireallyshouldknowthisbut
27th May 2015 09:03

.

Arthur,

I take your post to mean, "is it OK for junior staff to file VAT and SA returns without a seniors view?"

And the answer to that is, "it depends on what sort of practice you want".

In my office I review everything down to flat rate VAT, but then I sell myself as giving high quality service to 'run of the mill' work that would in a larger firm be delegated to a junior, and i have the main contact with the client. 

Many practices it would seem run somewhat differently, and the staff would file lots of basic returns pretty much untouched by the seniors hands.  Typically payroll and VAT, but possibly SA and small ltd co's too.  

This can mean big profits for the practice and the ability to scale up, it can also mean sloppy work and a rapid turnover of clients depending on how you do it.

Personally I would say EVERYEONE, myself included benefits from a review, paperwork on the wall not relevant.  

 

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By Kelly1234
27th May 2015 10:24

Unless I am completely missing the point of the OP - I read it that they are asking about employee's filing SATR's, VAT, and RTI and the responses seem to be based on if they were self employed and filing themselves for their own clients??

I file SATR's, VAT and RTI everyday, I'm part-qualified ACCA and have 10years experience.  My boss does not stand over me whilst I press the button to file.  It's not a nuclear launch.  I'm not registered for ML nor do I have PII - however my boss does.

So, based on what I'm taking this post to be asking I would say that it would be fine for you to allow unqualified staff to file on behalf of your clients, provided that you have reviewed it of course and are confident in their abilities and knowledge.

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By arthurallan
27th May 2015 11:15

DJKL

I happily take your point about knowledge of Corporation Tax. My question on May 5th about entertaining and corporate tax losses was a classic example of me not seeing the wood through the trees.

For some reason the software I use kept creating a CT liability for a client even though the client made a loss; after much head scratching I got to the bottom of why the software was doing this and it sorted itself out.

I think we can all get lost in detail sometimes

Ireallyshouldknow .. thanks for emphasizing the importance of reviewing all the work that one's staff does. As I start to recruit and develop the practice that will be important

Paul Scholes .. I agree I will be looking for potential employees with experience in areas of bookkeeping, VAT returns and PAYE; ideally I would like people with experience of actually working in an accountancy practice office

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By Richard Willis
04th Jun 2015 10:12

I never qualified!

I did the old IAS exams in 1979 and was referred in law and taxation (three times).  However by then I had a job in commerce and the very first task I was given was to catch up the VAT.  I have been doing it ever since (in a variety of companies) and, in the early years, when they had staff(!), we were audited by Customs every year as we were net claimants (exporters).  I have NEVER had a detrimental investigation so who would YOU rather do your returns?  Someone aged 23 with letters after their name or me?!

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