Accountant says I owe £2,200 ‘ASAP’

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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!

Which P60 did get used?

MirandaWest - They put down one company name but with the salary etc from the other company.

It's your job to hand over all your finance info and their job to sort it out

yes but any decent accountant would tell you what they need, and not leave you to guess. DH and I spent the some of the weekend pulling together what we needed to send for our tax returns. The accountant had sent a checklist with everything you might need - P60, P11D, coding notices, pension statements...

That's the basic sort of service I'd expect from an accountant to be honest.

? Accountant: please send me your P60s

Accountant: you owe HMRC money because you did not give me ALL your P60s

You: WTF? Why didn’t you tell me I forgot to give you this P60?

Accountant: and I am supposed to know you have x P60s how exactly?

AngelasAshes - It was more 'Can you send me the P60 for X job?'. And I did. I don't know what he can and can't get (well I do now) so only sent him what he asked for.

Sounds like you’ve all been remiss tbh. Surely you should realise that the importance of the P60 - all of them, not just one! So should your dh. He had two jobs and a P60 for each one.

Honestly even if you’re not interested in the accounting side, anyone running their own business should skill themselves up enough in the basics. It seems a bit odd that you knew enough to make your dh a shareholder in your business, and that paying him dividends was a good financial decision, yet you claim neither of you knew what the P60 was for, or that he was in the higher rate tax bracket

But OP why didn't you think to query about the other P60? What would happen if OH had started another job in the year, your accountant might not know about that, so wouldn't ask for it? Also if the return was showing the income for the wrong employment why didn't your OH pick that up before signing the return?

I don't know what he can and can't get
Eh? You expect all and sundry to voluntarily send over personal information to your 'accountant'? Have you never heard of Data Protection?

Likewise if you have ceased employment they will want P45 (but again if you only speak to this accountant for your tax returns) they might not know about this either, so they assume some common sense from their customer.

This is easily fixed by engaging a new accountant and prior to engaging them ensuring that their service includes 1) sending you a list of all information and documentation required prior to commencing work on your financial statements / returns and 2) a meeting to review and approve the accounts and tax returns each year prior to submission. Does your accountant also assist you with your CoSec requirements (e.g. statutory registers / confirmation statements)? If so do check that these have been submitted and are accurate and that any documents they hold are passed on to your new accountant in due course.

Red flag here. Sounds like a crook.

@sunshine

I assume that’s a joke or you are a bit dim.

If it’s the latter then just move on on posts you don’t have any knowledge about since there is nothing to suggest that on any of the posts

If your accountant is making mistakes as you describe with your husband's employment pages on his self assessment, I would look for another accountant. Making blatantly obvious mistakes like those would make me seriously doubt that he is giving you the best advice. I'm ex Revenue & Customs & the amount of taxpayers I saw who had just signed self assessment returns completed by their accountant & not thoroughly checked them was unbelievable, at the end of the day it is the taxpayer who is liable, not the accountant.

Did the accountant email over a copy of his tax return with the calculation showing the breakdown of income? This needs to be approved before submission.

Oh for heavens sake, I give our accountant every single thing, even if an account has earned 50p interest in a year.

If you have earned it you owe it!!

Coco because dividends are treated as your top slice of income and therefore get taxed at the highest rate. The two jobs would have utilised personal allowances and been taxed under PAYE. Dividends are taxed under self assessment and the OH is a higher rate tax payer, so he would have been taxed at 32.5% on the dividends above the £5k dividend allowance.

Most accountants are able to pre populate their client's tax returns now with data held by HMRC on pensions and employment income. It is possible that the information downloaded from HMRC was incorrect.

CTA is a far superior qualification to AAT. The two (optional) tax exams taken by AAT members teach you how to fill in the boxes on a tax return and make a few adjustments to profits. CAT, ACCA and ACA qualified acountants are taught tax law rather than just the mechanics under long training schemes passing hard technical exams. Your bid to save cash has backfired unfortunately.

Senua Actually, our engagement letters effectively give us the right to ask for anything and everything from our clients. How on earth do you think we can do our job without it? Professional accountants have strict ethical and legal requirements and there are specific clauses within GDPR relating to how we handle such information. If our clients withhold information from us, we refuse to act.

Hoghgyni - the CTA lady was far cheaper than this guy, and I only changed as she would take weeks to get back to me on things, and some of those things were pretty urgent.

If I was to instruct a good accountant to do what I need, how much should I be paying?

Agents do not have responsibility for the tax returns - the responsibility rests solely with the person who signs it and HMRC expects that the signatory (i.e. DH) has checked it and is happy that it is correct

this

It sounds a bit six of one but when completing people's tax returns I always do quick check against last years paperwork and particularly last years income figure against the income figure this year and would have questioned it. However, at the same time if paperwork is not provided ie. that you have received an inheritance from great aunt Joan or whatever then I won't know to include it but it would be picked up if you were to be inspected. The responsibility is yours by checking the return/calculation and signing the form.

All said and done if you are not happy then I would get a new accountant.

What work would you be expecting your accountant to do OP? Need to know that before suggesting fees

Oops grammatical error there

Red flag here. Sounds like a crook

We don't know how good the accoutant is at his job but what is there is suggest that he's a crook, that's a bit of a leap @sunshinecake Can you explain your thinking?

ineedaholidaynow -

Self-assessment for me, and OH possibly
Corporation Tax
End of year accounts
Ideally VAT returns

OH also paid tax on his two jobs when he got paid monthly

I still don't see where such a large underpayment has come from

Even if the accountant missed off one lot of earnings from the tax return the tax has been paid under PAYE, it doesn't need to be paid again and from what I understand from the posts above the tax on the £4200 of dividend isn't over £2000

Can anyone explain?

coconuttelegraph - OH's dividend that year was £9,200, but £5k of that was tax-free, so I think he only paid £315 in tax for that.

OH's salary for that year was £43,008, from his two jobs.