Accountant - breach of contract

[MsGee]

Hi,

I have also posted this in self employed but any legal advice appreciated

I have been self employed for a number of years, happily submit own tax returns etc.

In April 2013 I set up a limited company and appointed accountants to take care of my company accounts, namely: annual financial statements; all wage and PAYE / RTI paperwork; P14/P60 and P35 and company secretarial services.

I received a letter last week from HMRC saying the company had been flagged as dormant. The accountant has done NOTHING. Not a single RTI payment.

They are 'bemused' as to how this happened and will fix it. But I have lost faith in them.

HMRC said that they may issue a penalty but not sure (looking less likely).

The contract with the accountants does not have anything about ending the contract in the case of not fulfilling terms. Just that it lasts for one term.

My questions are:

1. I should get rid of the accountant yes? I am debating going alone vs finding another accountant at short term.
   
2. If I refuse to pay a penny am I in breach of contract or should I just email to dissolve contract as they are in breach?
   
3. Is there anything else I should do?
   
   Any help appreciated on this!

[Lonecatwithkitten]

I don't know about the legal side, but a large amount of what you have listed a good book keeper could do for you for the fraction of the cost. Plus a good book keeper would keep in close contact with you.
Then personnaly I would find another firm of accountants to do the final bits and get a fixed price from them.

[tb]

I would also make a complaint to the relevant professional organisation - ICAEW, ICMA or the one for ACCA - sorry can't remember what they're called.

[Bearleigh]

A Chartered accountant writes:

If they are qualified as Chartered accountants, they should have issued you with a 'letter of engagement' setting out what they understood they would do for you. I believe the other professional institutes have the same requirements.

That should be your starting point - see what they said they would do.

If they have literally done nothing, then it may still be easiest to go along with it for the one year and then move, having found an accountant you can do business with long term. I am slightly bemused by the apparent lack of contact including over RTI - did you not contact them at any time?

Their professional status (as Chartered accountants or as Chartered Certified accountants should be on their notepaper. If it says nothing then they may have no qualifications at all... Anyone can call themselves an 'Accountant')

[MsGee]

The letter of engagement set out all the things mentioned above, so they definitely should have been doing this.

I did query about the RTI but they said that because I get the same amount (below tax and NI threshold) on the same day every month + same level of dividend monthly that it was very easy and all I had to do was pay myself and they'd sort the rest. Very naive but I trusted what they were telling me...

They have said that they will sort it and pay the penalty if I get one. So not sure whether to trust them. I've had a bugger of a month (dad, PIL and DD in hospital all in the same month!) and I am too exhausted to fight!

[Bearleigh]

Go for it. I suspect they just didn't get you set up as a client. Not professional, not impressive but you have other things to worry about. I am concerned about paying dividends monthly though, especially in the first year. You might not have had enough distributable reserves...