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Christmas clients: Who’s on your naughty list?

As 2020 draws to its merry end, AccountingWEB readers are deciding which clients will get a lump of coal in their stockings this year.

15th Dec 2020
Community Assistant AccountingWEB
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Christmas coal

The headaches of this year have often been amplified by those constantly confused and questioning clients, pushing many accounting professionals to their limits.

But, never fear, AccountingWEB is here to listen to your client crises! We caught up with some of the most sigh-inducing stories from the profession this Christmas.

Report to SOCA?

“Does my client need to be reported?” asked AccountingWEB reader taxwizard.

In the Covid confusion of ever-changing government guidelines, making sense of the loan eligibility for small business clients can be challenging. Taxwizard’s client did not stop working throughout the pandemic, but managed to take out the full £50K Bounce Back Loan.

“The pandemic did not affect his business therefore [they're] technically not eligible for the loan,” said the AccountingWEB member. “Though I am so sure many businesses have missed this point as they have just taken the loan without any thought.”

In spite of this, taxwizard was unsure whether they were obliged to report their client to the Serious Organised Crime Agency (SOCA).

With so much perplexity surrounding loan issues, other readers could sympathise with this client problem. “Your client and almost every other business I know,” responded reader NH.

Adam12345 agreed, commenting that the amount of unchecked loans being dished out would undoubtedly cause inflation to rise significantly: “Systemic fraud is clearly occurring with the BBLs.”

However, other readers argued that light was now being shed on the clients you’d rather not take with you into 2021: “I have just disengaged with a client who did this and then withdrew the funds for personal reasons,” replied Guilford Accounting. “The pandemic has been a good test of who acts ethically.”

Furlough festivities

In amongst the masses of missed furlough claim deadline complaints, AccountingWEB reader Crouchy encountered a moral dilemma with a few of their clients.

“Basically they want to shut down for a few weeks and claim for that period, citing it will be quiet, they are in tier two and allowed to open for the type of business they are,” explained the reader. “This would include staff who have not previously been furloughed at all and have worked throughout the pandemic.”

Feeling uneasy about the prospect, they turned to AccountingWEB for advice on whether to proceed.

While some readers agreed this was a fair and just thing to do, many others advised against it: “I would suggest client does his own claim and pays attention to the the ABUSIVE bit which will appear on the screen,” replied Paul Crowley.

Some readers were unable to deal with any more furlough queries. “Please make it stop,” replied Arthur Putey.

Educate or disengage?

When dealing with an uncooperative client, there’s always the tricky question of whether to “educate or disengage”. AccountingWEB reader Hut15 encountered this problem when a sole trader client sent in their annual bookkeeping records in the form of an email listing a series of monthly expenses and total takings for the year.

“She didn’t say so, but I inferred she expected me to simply multiply the expenses by 12 and put them into her tax return,” Hut15 told the Any Answers community. “I responded that I couldn’t prepare a tax return from so little information and requested (as a start) the year’s bank statements.”

After receiving a response from the client that the statements were not available alongside an offer to just complete the return herself, Hut15 found themselves in an internal battle between a desire to just say ‘go for it’ and a compulsion to point out the glaring errors that would result if the client did take the wheel.

With the rising conflict, there was also the temptation for complete disengagement.

“Do we get rid with no more ado, or we do attempt to educate?” Hut15 questioned, wanting to retain professionalism.

AWEB member Truthsayer, aptly, advised being honest: “Just be truthful early on and avoid a lot of trouble for yourself.”

The majority of readers advised the same, urging against email in favour of a one-on-one or socially distanced equivalent: “To avoid any future misunderstanding I would then follow up the phone call with an email confirming all points raised and my expectations,” said AWEB reader Jackie in Wiltshire.

However, some readers argued against the educational approach: “Is the client worth spending the time to educate and will they be a good client going forward or are they likely to ignore what you say?” asked lesley.barnes. In the midst of such a busy time of year for accountants, weighing up the financial and stress factors seems like a wise strategy.

“Either they supply the relevant information, or they take a walk. Their choice, not yours,” said ireallyshouldknowthisbut.

To me or to you?

Reader MGD had to disengage after a client who owned a small property investment company became aggressive. The AccountingWEB member didn’t know whether to see through their sketchy accounts or just let the next accountant deal with the mess.

“Should I just leave the disputed amount in debtors, finalise the accounts, file them and give a good explanation to the new accountant as to the nature of the disputed amount in debtors?” they asked on Any Answers.

Overwhelmingly, the response to MGD was to just walk away. “You've resigned, do no more, consider a SAR if appropriate,” advised Wanderer. “Inform the new accountant of the reason for change after getting (ex) client's permission to pass on information.”

Some even suggested suing in the small claims court on the grounds that the client was abusive and fraudulent: “The client is unlikely to defend the action as he would not want his crooked dealings exposed to the world,” said paddy55.

“My sympathies lie with the new accountants who will probably have no idea what they are taking on,” replied another reader, after which MGD assured that they would explain to whoever dared take on the challenge.

Which of your clients made the naughty or nice list this year? Feel free to share your 2020 client conundrums in the comments.

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