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ICAEW excludes late paying accountant over cancelled practising certificate

Confusion over an unpaid practising certificate and membership fees has resulted in a part-time accounting firm principal being excluded from the ICAEW

27th Aug 2019
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Malcolm Ellison often paid his ICAEW subscriptions late, but this tardiness eventually resulted in the cancellation of practising certificate. Things escalated when this cancellation went unnoticed. 

Ellison continued practising without a practising certificate for a further 21 months. It wasn’t until the ICAEW reviewed Ellison’s profile in 2016 that the Institute realised his certificate had lapsed in July 2014. 

When the ICAEW raised the matter, Ellison responded that he was unaware he had breached the ICAEW’s rules. “I do not believe I have not paid fees demanded,” he said in a response in April 2016.  

Ellison said the confusion started when the finance department informed him that he had overpaid his fees and that his balance would be carried forward. “I queried this as it seemed a ‘suspicious’ communication but I was told it was in order,” he remembered. 

Filling the gaps missing from Ellison’s version, the investigation committee unearthed financial records which showed Ellison’s late paying ways and pieced together the reason why Ellison wrongly assumed he had overpaid.  

The amount due for 2014, which included the practising certificate fee, was £349, but Ellison only paid the low rate membership fee of £45. He followed this up in June 2014 with a further £100, which would still not cover the practising certificate and Practice Assurance fees. 

With the ICAEW’s finance department feeling shortchanged, it contacted the part-time practitioner a number of times to clarify his position - namely, if he still required his practising certificate. 

Coming up against radio silence, the finance team took it up themselves to cancel Ellison’s practising certificate without notifying him. And this is where the confusion originated around Ellison believing he was in credit because he received £100 in credit and an invoice of £50 for the low rate membership subscription.

The disciplinary tribunal accepted that the allocation of late payments had caused considerable confusion and fuelled his practising certificate misunderstandings.

However, the tribunal could not overlook Ellison continuing to engage in practice after the ICAEW informed him in August 2016 that he was breaching regulations.

Since Ellison undertook high-risk work such as bookkeeping, VAT, payroll, accounts and tax for a client base that grew from approximately 31 clients in 2014 to 53 clients in 2017, the tribunal decided on exclusion as the appropriate sentence. 

Ellison was also instructed to pay costs of £4,002 and a £1,000 fine.

For further information on the Accountants National Complaint Services Limited, phone Chris Cope on 01769 581581 or visit their website.

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Replies (19)

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By justsotax
27th Aug 2019 09:14

'high risk' work such as bookkeeping, VAT payroll?!?!?!

As he is ICAEW I presume that it is the client type that puts the 'risk' into his work....?

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By memyself-eye
27th Aug 2019 09:46

I read the 'high risk' statement and laughed.
What - pray tell - is 'low risk'?

What a joke.

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By FirstTab
27th Aug 2019 09:49

Punishment does not fit the crime.

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By busacrun
27th Aug 2019 09:56

the timing of subscriptions doesn't change year on year, so this guy really has only got himself to blame here

ICAEW really haven't covered themselves in glory though, cancelling the practising certificate and not advising of this is P#*s Poor, how did they expect him to stop

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By Tosie
27th Aug 2019 10:12

High risk !!! £4k .Further evidence that the institutes are not interested in the small practitioner.
All those years of study wasted . Could even mean that he loses his job as I assume that he is working at the same time as trying to build up a practice.

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Replying to Tosie:
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By ColA
27th Aug 2019 12:06

Do have to wonder who ICAEW is interested in apart from the sizeable practices.
It’s certainly not those in industry/commerce or the small practitioner.
Glad I’m retired after 49 years continual activity.

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By graydjames
27th Aug 2019 10:38

Everyone else has said just exactly what I was about to write; what an extraordinary conclusion: routine practice work such as bookkeeping, VAT, accounts and payroll is "high-risk".
I'd love to know what work constitutes low-risk; I can't think of anything I do which is lower risk than bookkeeping. Chatting with the older clients about their grandchildren perhaps!

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By Helen Piper
27th Aug 2019 11:55

In 30 years of providing Accountancy services, no client has ever asked me if I am qualified! I gave up my membership of an accountancy organisation years ago as it didn't offer anything for the huge membership fee. I expect that large corporates might require evidence of qualifications, but as we have seen from some high-profile recent 'gaffs', even the largest accountancy firms can make expensive mistakes. I doubt if this ruling is going to change Mr. Ellison's life.

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Replying to Helen Piper:
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By Tosie
27th Aug 2019 15:09

Helen, I would agree with you if Mr Ellison was running a full time practice but apparently he is part time which suggests to me that he is building up a practice whilst still working. Interested that you manage to practice without membership of any body. Assume that you are registered for money laundering with HMRC. What about references etc. I think of resigning everytime the renewal notice arrives but I would feel strange describing myself as an accountant if I resigned but as you say who cares.

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Replying to Tosie:
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By justsotax
27th Aug 2019 15:42

so you would feel strange about describing yourself as an accountant the day after resigning from ICAEW....what's changed...? have you suddenly become de-skilled? (which seems to be the implication?)

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Replying to Tosie:
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By memyself-eye
27th Aug 2019 15:44

You don't need to be a member of an accountancy 'body' to register for MLR - none of my clients have ever asked if I am (I'm not)
I just describe myself as "one who counts beans"
Maybe Heinz have a membership body I could join?

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Replying to Tosie:
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By Helen Piper
27th Aug 2019 17:34

Dear Tosie
It was easy to register for AML. All of my clients have been referred by satisfied clients - they're the best! Proof of the pudding etc. etc.

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By carnmores
27th Aug 2019 15:08

The ICAEW are extremely poor on this front and have now acted in a pathetic manner to this poor ex member

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By mrme89
27th Aug 2019 16:07

The amount of poor audits being conducted and the big firms go unpunished (and when they do the fines are paltry in comparison to their size).

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By Dandan
27th Aug 2019 16:24

If I were one of his clients, I'd be happy to continue using him as my accountant; albeit no longer recognised by his professional body. After all , he is still an experienced acountant; simply no longer able to have letters after his name.

Experience has taught me that tardy people are very often the best when it comes to pulling you out of a bad situation. Tardiness somehow seems to go hand in hand with a certain kind of selflessness.

The accounting profession is heading for extinction while it is still burying its head in the sand. What will replace it are technicians specialising into different aspects of business and compliance but not coming under the umbrella of a "body". Already software companies are starting to assume the different roles.

Sadly, I speak as an accountant .

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Replying to Dandan:
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By AnnAccountant
28th Aug 2019 08:29

I think you mean that an accountant who is tardy and doesn't stick to the rules, is more likely to bend them if a client leans on him a bit.

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Replying to AnnAccountant:
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By justsotax
28th Aug 2019 09:42

He probably acutely understands his clients problems and may well as you put it 'bend' the rules....(albeit not break!).

But I wonder how this compares to the big four or top 50, who I have little doubt do exactly the same but for their bigger clients....indeed tax schemes are born from 'bending' the rules....

If being tardy is a crime by your definition I dare say there wouldn't be many accountants who would get into the ICAEWs club....

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By Balancing
27th Aug 2019 20:35

.

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By Slim
28th Aug 2019 11:03

Again, high risk areas?! I had always considered my practice to be low risk but perhaps not!

I wait for the day ICAEW bend me over..

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