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!

The liability was always there, but OP's OH didn't realise. Which is why everyone should have a rough idea of their income and do a rough calculation of how much tax has been paid and is due. They now acknowledge that there were mistakes in the tax return with employment income, but they didn't do anything about it before the tax return was submitted.

This is your fault not your accountants. Even if your OH didn't give all the information to the accountant to prepare his return, he should have noticed there was income missing when he checked the return before it was submitted.

You cannot expect your accountant to know what income you and your OH have if you don't tell him.

I understand you are annoyed, but it is called 'Self assessment' for a reason.

However, if you don't trust your accountant, then that is a different matter and you should move. But don't blame him for this.

Re fees - I deal with clients just like you - to give you an idea of fees, assuming you do bookkeeping

Checking VAT returns - £50 + VAT pq
Payroll for you (I'm assuming you are on the payroll for your company) - £200 + VAT py
Self Assessment - £100 + VAT each
Limited company accounts and tax - £750 + VAT pa
Annual Compliance Statement - £50 + VAT

I do accounts, I try to prompt and prod to get all the information but ultimately I can only submit what I have. You dh will be paying tax (at 20% most likely) on whatever he earned from your company

Funghi

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

As does a lawyer

OK, I'll tell the lawyer that did the conveyancing on my recent house sale that the checks he and the lawyers representing the buyer did were totally unnecessary and he should have taken my word for it.

As the director of the company, you are solely responsible for this. You need to understand at least the basics, as you have to sign off the accounts.

In addition, sounds like you need to hire a bookkeeper!

With AAT, your 'accountant' is an accounting technician, not the same thing at all. With ACA, ACCA they'll have at least 3 years approved training post degree, including professional ethics - though tbf to look at some firms, you wonder. Sadly, unlike other occupations, accountant is not protected, and so any man and his dog can put an advert in yellow pages saying they're an accountant without even gcse maths.

Thanks Hoghgyni

With AAT, your 'accountant' is an accounting technician, not the same thing at all.

That's the minimum they'll be. You don't know what else they may have, i.e. they may have had years of experience in a chartered accountancy practice doing tax returns which is far more relevant than any paper qualification. Lots of AATs are part qualified chartereds who couldn't pass their final exams in the days when you had to pass them all in a single sitting doing hand written paper exams - they would then get the AAT based on the exams they did pass and relevant experience or they may have done the AAT before embarking on the chartered course. There are also some ACA/ACCA accountants who've resigned from their body due to restrictive practising certificates and got the AAT qualification instead. No one knows unless you ask the question of the individual concerned. Just taking the paper qualification in isolation is often not useful.

Are you allowed to call yourself "an accountant" if you're not a chartered accountant?

Are you allowed to call yourself "an accountant" if you're not a chartered accountant?

Yes, the word accountant isn't protected so literally anyone can call themselves an accountant and set up an accountancy practice, whether they've any qualifications or experience or not.

Of course, the likes of banks etc have a list of qualifications they'll accept when it comes to earnings confirmations/accounts, etc., but it's a pretty long list and includes many different levels of accountancy bodies, even some that don't need accountancy qualifications!

The "chartered" bodies such as ACCA, ICAEW, etc have rules prohibiting non members using the "chartered" description but they seem pretty impotent in policing it as there are many firms purporting to be "chartered" who aren't. I've reported a couple to the ICAEW some years ago, but they're still using the "chartered" description, so clearly the ICAEW havn't been able to stop them.

It really is a case of "buyer beware" when chosing an accountant.

Not sure why it's not properly protected/regulated in the same way that solicitors, architects, financial advisors etc are regulated. The accountancy bodies have been campaigning for proper regulation/protection for decades but successive governments havn't been minded to do anything!

That's interesting. I had always assumed that you couldn't call yourself an accountant if you weren't. I'm not sure I would think to check either.

This thread is really worrying. What a mess!

OP has maintained throughout that her "Accountant"..... but then said he was AAT qualified. Which isn't an Accountant at all! Not that there's anything wrong with an AAT qualified person doing tax returns - I do tax returns for my friends for free! But that's not the point. I don't hire myself out as a qualified accountant.

None-the-less the checklist the Accountant should go thorough should have raised the issue with that 1x P60 was missing.

plus op's 0H should've checked the form and signed it prior to submission.

@strongthighedbargeman

DH's income was £43 008 from employment and £4,200 taxable dividends. His personal allowance was £11,500 & his standard rate tax allowance was £33,500.

His tax calculations should be as follows:

Earned Income £43,008
Personal alliwances,£11,500
Taxable pay £31,508 @ 20%

Dividends are taxed @ 7.5% standard and 32.5% higher rate. The calculation would be

Dividend Income £4,200 taxed as follows:
Standard rate £2,000 @ 7.5% = £150
Higher rate £2,200 @ 32.5% = £715

DH has paid £315 as when the tax was calculated the accountant was unaware of the £7,380 earnings taxed at standard rate reducing his standard tax allowance

When OP mentions the £2,200 I think this is the gross figure on which tax was underpaid at 7.5% instead of 32.5% meaning he owes £550. Obviously this has been picked up by HMRC as PAYE returns are filed electronically.

I am AAT qualified and my annual licence says "AAT licenced Accountant", and that has to go on all correspondence including my licence number so that people can check if they want to.

I worked in general practice for over 20 years building up my knowledge and experience and one reason for leaving after all that time was all the younger trainees becoming ACA and still having to ask me everything as I had more knowledge/experience than them and they were being paid more than me due to their qualification.....

So yes, I am an Accountant........ I only undertake work that I am sure of, I steer clear of Limited Companies as I don't have enough time to keep up to date with everything. (I do the accounts to a certain level, but not the final accounts or tax returns and I am not licenced to do them).

I am regulated by the AAT, by HMRC, I have PII, I have PLI, and I have to keep my CPD up to date and prove that to AAT each year, that I am keeping up to date.

I don't touch anything that I am not licenced to do, like CGT or IHT etc, but I am fully competent in what I am licenced for which is accounts, tax return, VAT, software, payroll and company secretary.

It is a bit mean to belittle the AAT qualification.

Also, I worked with a man who had no qualifications as he got time barred on his Chartered exams and wasn't allowed to sit them again. He has extensive knowledge and skills and is very highly paid and works for a very good firm who can see his true value and experience. He was my manager for a while and I was more qualified than him, which meant nothing.

It's your responsibility to give him all your financial papers , if he only has one p60 then that's what he had calculated on