to think that dividends included in the calculation for student loans

[ginplease83]

is actually quite basic.

Just had a £5k tax bill from the HMRC the week before I go on maternity leave (great). I draw dividends from my Ltd company as well as a small salary and my accountant has confessed that he didn't realise that you have to include dividend payments when you calculate how much student loan you need to repay.

I found out this from the student loan website- AIBU that the accountant is pretty stupid to not know this?

PS. I am not disputing i have to pay it. But i would have liked some notice!!!

I am also a chartered accountant and have tax clients.
A few things spring to my mind:
1, yes he should have known
2, did you do a paper return? As my tax software calculates student loans for me automatically so it couldn't have been missed anyway as long as I had ticked the student loans box
3, he has actually only cost you the interest and nothing more, so probably nearer to £50 than £5,000
4, any professional liability insurance only covers the extra that the mistake has cost you, not the tax he didn't advise you on. So it really wouldn't be worth claiming on it.
5, just because he missed one little thing doesn't make him generally incompetent. If I'd done this, I may as a gesture of goodwill offer to refund one year fees but I wouldn't be refunding you all of it as I'd still done the jobs
6, I usually talk through things with my clients to make sure they understand all the numbers but I wouldn't ordinarily hand over my working papers. If there was a specific query I would obviously go through the numbers for that. But it can be very frustrating when a client says I make it X, why do you say Y and you have to basically spend ages explaining why it is, and politely explaining that they pay me as I have years of education and experience and do usually know a bit more about it than they do. Hasn't happened for a long while but it can be painful.

OP, glad you have found someone that you sound happy with now.

Finally to the previous poster, no a degree in accountancy doesn't make you an 'accountant' in my eyes. A 'proper' accountant in my eyes would be qualified as a Chartered or a Chartered Certified accountant, so a member of ICAEW or ACCA.

He's FFA but the guy I think he might give it to do is FCA. However that guy might do our Ltd company accounts.

No offers of refunds to be honest I wasnt expecting this of him. What's got to me I think is that this monies owed have been sprung on me and I pay him so that I avoid situations like this. I won't trust him again so best I move on. If I ballsed up on one of my patients like this I'd be hauled over the coals so to speak but I can't imagine making such a basic error.

If to be an accountant, you needed to be a chartered or chartered certified accountant, surely the term 'chartered' would be redundant?

Fwiw, the very worst accountant I ever knew was a chartered certified accountant. His assistant, aat qualified so an accounting technician, was forever having to chase him up and correct him. He was approaching retirement, her qualification was much more recent - but a trial balance not balancing was such a basic error it was ridiculous.

Dividends in lieu of salary ARE a tax dodge though. You save employees and employers national insurance unless things have changed in the last few years.

99- its the same with lawyers isn't it. Anyone can call themselves a 'lawyer' even if they are an unqualified paralegal but only someone who has qualified can call themselves a 'solicitor'. The chartered bit identifies the level of qualification achieved and thats it.

Bograinger - Yes you are right, you don't pay NI. Whats your point anyway?

You said it wasn't a tax dodge.

It was a tax dodge in the 90s and ultimately led to the introduction of IR35.

IMeh no I don't pay NI on the scraps I take after the tax man takes his CT. it's not something I do to avoid tax.

if I took a salary reflecting my market rate id be much better off and yes I'd pay NI and have all the lovely things like paid holiday, pensions but my business would go under and my 10 employees would lose their jobs so I don't lose any sleep over it.

It used to be that only chartered accountants qualified from one of the Institutes, ie, ICAEW ICAS etc could be called chartered. Then something happened and now every man and his dog is a chartered accountant.

Really annoys me as the original chartered qualification is way more difficult to achieve than ACCA etc. Ah well, rant over

Lashesandflashes - I agree entirely.

In non-work context if people ask what I do I just say I'm an accountant, I don't trot out the FCA qualifications. It doesn't stop it being very frustrating when someone says 'oh X is an accountant too' in social circumstances and I know very well that they once did stage one of AAT but didn't finish it. (Yes I am thinking of someone specific!) My head is screaming, 'not a proper one' inside but of course I just say 'oh, really?' In a pleasant manner whilst seething inside.

HMRC won't give you a rebate. As far as they're concerned, you've owed tax and didn't pay it. What they will do is perhaps suspend or reduce any penalties you might incur but they won't revise their figures. If you want compensated, you need to get that from your accountant as he's made the mistake, not HMRC.

I hope you get it sorted though OP. That is just not what you want before having a baby!!

I never imagined I'd get a rebate. I know I owe it and I've got to pay it. He's a damn useless accountant though and I've established he should have known to include it. I'm considering asking him to refund his fees for my return last year as it's clearly wrong.

Any suggestions how I go about the move?

I have queried his workings on our self assessments as some aren't adding up. I did this on Friday and got no response to this request and also as he said he was going to speak to the HMRC about spreading out the payments as I'm going to have trouble finding the money. Now it appears he's gone on holiday to the lake district without sorting it out for a week. I don't begrudge him a holiday but at least hand it over to someone else or tell your client you aren't going to be responding to emails.

Now I get why you shouldn't mix friends and business. Naive of me I know but its bitten me in the bum.

Do I send an email saying exactly WHY i am moving and detailing all the issues I've had with his firm or do i just get the new firm to send the information request?

If you just want to change accountants I'd send him an email to say that you are changing to an accountancy firm that has more specialist knowledge/experience with people working your sector. (In this case that would be the sector that includes graduates). They will need to contact him for information and you will need to give him permission to forward any relevant details.

I don't think you need to explain why you are leaving, but if he is a family friend you should tell him that you are leaving.