Accountant says I owe £2,200 ‘ASAP’

[peakyblinderoriginal]

I’ve had my accountant for the past couple of years. Over the past year there’s been a few issues which I’ve had to flag up - letters from HMRC saying my business owes X, or him saying a refund for £1500 he said I was getting I’m now not (which I’m the end I did get as I challenged it with him).

He said he’d do my OH’s self-assessment as he’s a shareholder in my business at no extra cost. OH has two jobs, which accountant knew, one being a permanent contract and one being 0 hours.

Last week OH received a letter from HMRC saying he owed over £4k!!!!!! 😳

Emailed info to accountant who said he didn’t owe that but did owe £2,200, and it needed to be paid ASAP!?
He said he didn’t get the P60 for one of the jobs, so didn’t include it in the accounts for that year. He didn’t ask for it, and I didn’t know he needed it as he did ask for one but not the other!?

I don’t know if I’m BU, but surely if I pay my accountant to do my accounts he should get it right, and if he doesn’t there should be some liability on his part?
I pay him as I’m not an accountant and he is supposed to be the expert!

Plus we’re now expected to find £2,200 to pay HMRC ‘ASAP’ because of the accountants error.

As a small business this is a huge chunk of money to just find, and that is why I pay my accountant, to take the stresses away from me regarding tax/HMRC etc. His attitude is just ‘Yeah, you need to pay this asap’ which is also annoying me!

If you are self employed you really should be up to speed on this stuff by now, four years in. If you're was year one, I'd have more sympathy, but you are responsible for making sure your financial affairs are in order, and four years in you should have a better idea of what that entails. It's part and parcel of being self employed.

Your accountant is responsible for preparing accounts and tax returns based on the information supplied. It's fairly obvious, whether you are an expert or not, than he can't work with information he doesn't have.

And yes, as has been stated, the tax returns should have been checked by you /your husband and if the income on it was significantly lower than actual earnings, that should have been picked up at that point.

*OlivesAreGod

I don't think people need to 'check' work necessarily because that implies you could essentially do the job yourself?!*

No reason why you can't do the job yourself. Tax returns for a straightforward business are not difficult.

But unlike a lawyer, an accountant works purely from information supplied. Checking basics is a great way of making sure that you haven't made a mistake by omitting some information. So you are just as much making sure you haven't made an error than you are checking the accountant hasn't.

OP i agree with you and im not sure why you're getting a hard time here.
Its not about you not providing the P60 in the first place - its about your accountant - he would have realised he was missing one and should have asked you for the other! Surely thats part of the job, to make sure they have al the info they need?

As a small business this is a huge chunk of money to just find,

It's not the business's tax to pay, it's your OH tax, so the business doesn't have to find it. You don't say your OH works in your business and even if he did, assuming this is income tax, your OH is responsible for it. He's also responsible for making sure his tax return is correct by supplying the right information and then checking it.

It's not common for companies to cover the cost of a tax return for their shareholders - and this would be seen as a taxable benefit in kind your PH should declare.

But unlike a lawyer, an accountant works purely from information supplied.

As does a lawyer

I would get a new accountant and seek their advice on the situation. Your current one is a waste of money.

How can he "get it right" if you don't give him all the information? Do you think he's a mind reader?

I think the OP thinks (thought) he's a professional, who she pays to think of all this stuff so she doesn't.

I would think he should know to ask for both P60s if he needed both. Especially as he didn't just expect her to know to provide both – he 'did ask for one but not the other'.

OP, get a new accountant, but first I'd check with whatever the right professional body is about his liability for this 'asap' bill.

Most accountants will bill you for time spent chasing you for information, unless you book a cheap package in which case they expect you to he forthcoming and if you’re not it’s on you. Read your contract of service carefully.

Our accountant was shit and clueless and presented us with a corporation tax bill of £3000 in our first year of business. We were a startup who had made about a tenner profit. We changed accountants and now have one that knows what he's doing and our corporation tax bill is now a couple of hundred. We had to borrow that £3k from a friend. I'll never get over the injustice of that. I think we paid more than Amazon that year

Doesn't your accountant ask you to check the return before submitting it?
Mine does and it would be obvious if an income stream was missing.

But they also have a comprehensive questionnaire they send out to get all details for the return, which spells out they need information from all employment, especially if income is from a firm they don't act for.

I'd double check everything that was submitted and then shop around for a new accountant as yours has lost your confidence.
Mine will hand hold me through anything business and tax related and is an absolute gem, I have friends with the same firm who have a different accountant and they have problem upon problem.

When you have your own business understanding the finance is really crucial. It’s your business that will go under if you don’t. Do you meet with your accountant? It’s important you understand this stuff, it’s the lifeblood.

As an accountant, when i send out tax returns, I point out that the return has been completed from the information provided by them, and that they are responsible that it is accurate and that there are no omissions. (as per HMRC law).

The taxpayer has to sign the form, so they have to check it and ensure that all income and expenditure is on it. I also ask the taxpayer to confirm that they have declared all income as obviously they are defrauding HMRC if they don't.

I don't get why anyone would hand over one P60 and not the other, when you know that both have earnings on for the tax year. The tax return has a page for each job, so your OH should have noticed that there was only 1 job on there, and handed the information over. He does have to take some responsibility for this.

Anyway, your DH is liable for the tax, it is his tax bill, not the company's. you can ring HMRC business support and ask to pay it over 12 months, just google the number. He will need to speak to them himself.

You could possibly sue your accountant if you can prove that he did not give you a letter or email asking for you to declare all relevant information.

At the end of the day the taxpayer is responsible not the accountant, that is how HMRC see it. Whether that is fair or not is another matter.

It's obviously not working so get a new accountant. Call HMRC and see if you can set up a payment plan, is this for a balance for last year?

I am a bookkeeper and technically my contract states I work from the info supplied to me but I take into account that a lot of people don't know I need P60's/CIS statements that sort of thing so I do ask for them. However was it a case that he said can I have your P60? and you only supplied 1 even though you had 2 that is kind of on you. You do have a responsibility to check what the accountant sends you before you approve it for filing.

Did the accountant know that your DH had 2 roles? If you handed me a P60 i would assume that's the one one he had, I wouldn't think to ask if he had another job and another P60 if I hadn't been informed of it.

It is difficult to tell who is in the wrong here because we only have OP's version of events.

As bob described, Accountants usually send out a "tell us everything" (with handy prompts) letter and also ask the client to confirm that the Return is correct before submitting to HMRC. Apart from being good practice for the client, it is also a 'cover your backside' routine for the Accountant.
My mind does boggle at the idea that OP thought that the Accountant would want one P60 but not the other.
You delegate the donkey work to your Accountant but not the responsibility. It's like any other task that you delegate; you always check to make sure that stuff is happening in line with what you expected.

I pay my accountant so that I don't have to worry about these things. Yes, legally, I can't delegate responsibility but I have every confidence that my accountant will ensure I'm on the right side of the law.

You need a new accountant.

Yes, I ask for all forms of income to include P60's from ALL employment, self employed earnings, rental income, dividends, interest and any other income in any form. I also ask them to confirm that they have declared all cash income. haha

I worked in general practice for over 20 years before setting up on my own, so use the standard format requests that they used, which ask for pretty much everything.

The onus is on the taxpayer to provide all relevant information. I don't see how anyone can plead ignorance after providing 1 P60 but not the other . When you check the return before signing it, you should have realised that it only had 1 on it.

Taxable income is anything over and above your personal allowance. HMRC will have all P60's filed at their end via payroll, so when your OH's return went in and didn't declare it, it would have flagged up that it didn't match.

@Funghi

I’m a lawyer. You’re right right: I just dispense advice that I have made up, with little or no regard for the facts of the situation.

Jesus.

He did OH's accounts the previous year, and knows he has the two jobs. I would have also assumed he'd have this in his notes.

He is AAT qualified, which I know is the most basic level of accounts, but my previous accountant was CTA and she wasn't that great.

I previously did my VAT returns, and now use Xero so it's all there, and I do all the reconciliations. It was more for corporation tax, end of year accounts and self-assessment, and he doesn't mess this up, just my OH's self-assessment.

I pay £99 a month, including VAT, and that covers the self-assessments for me and OH, corporation tax, end of year accounts and if I have queries.

It's only OH's self-assessment that's not right.

Just looked back on the self-assessment he did for OH in 2017/18.
Lets call his two jobs Company A and Company B.

Company A is his 0 hours contract job.

Company B is the permanent job.

The self-assessment he did had the figures for Company B but under Company A's name.

He only put one company down.

He's now sent me an 'amended' form, which now has the two companies on it.

Is yours a limited company? If so, check the accountant has sent the accounts to Companies House after you have approved them

It’s a bit unclear whether the accountant has been at fault here but if you’re not happy, then find a new one.

One thing I don’t understand though: your dh had two jobs as an employee. What on earth did he think the P60 was for? Surely it’s common sense as an employee to know that you’ll need it for tax purposes? It’s printed on the top : ‘do not destroy. You will need to keep this’ or words to that effect.

HMRC are fairly reasonable and likely to allow it to be paid off monthly but if he owes the money, he’ll have no option but to pay it.

I am a limited company, and the accounts have been sent as they're on Companies House records. This is for 2017/18.

if your DH owes over £2000 of tax on company A he must have earned over £10000 from that job was it it obvious that the amount of earnings on his tax return were too low?

The accountant should have given you a list of everything he required and chased you for it. That’s what decent accountants do. But there are a lot of people who are completely shit in that industry. You get what you pay for as far as accountancy is concerned.

As bob described, Accountants usually send out a "tell us everything" (with handy prompts) letter

Mine never has.

I'm confused as to why the OH, with two jobs, is not being taxed on PAYE anyway.