I am unreasonable on blaming my accountant?

peterwall

Any opinions on this.

Got a serious shock and feel my accountant should have foreseen this issue and warned me.

I bought a business couple of years ago. It was set up that I personally bought the building, but rented it to my company.

Due to circumstances, this is the first year I have got a tax liability on the rental payments (rent less interest portion equals capital payment, capital payment is taxable)

Now I dont know why, but last year, I got a rebate on my tax, but this year I have a self assessment of 20 grand.

Apparently, I have a liability of 10k for this year and, under the rules, a preliminary liabilty of the same again. I believe this is due to be paid shortly.

Now I have made no provision for this. No one told me to expect this, no one told me it could even be a possibility. I was actually hoping for a rebate again. I am new to all this tax lark and feel seriously put out by this.

Am I being unreasonable in blaming the accountant for not foreseeing this, or is this something I should have researched and seen coming.

If someone had of told me a year ago, this was on the cards, I would have started saving for this.

I have been saving hard all the childrens birthday money, childrens allowance and any spare cash and have it in the bank. A lot of the money in my name belongs to my kids, but its all mixed in. On reading the revenue website it mentions inability to pay and special arrangements are based on seeing bank statements. My statements show I have money in the bank !!

I feel gutted.

Am I unreasonable in feeling hard done by by my accountant?

J.Ryan

First of all Prelim tax is only an estimate, you pay 100% of previous years charge or 90% of expected current year liability, can you (or your accountant) do a quick calc to see is 10K needed.

I can't comment on whether or not your accountant is at fault, Can you review any letters or emails he sent you to see, sometimes firms send this all in writing and just mention it casually in a meeting, thinking the letter will re-inforce the point, I prefer to do a rough prelim tax calc when doing the the Income Tax return, it won't be completely accurate (as the year is not up, some things can change) but it should give a decent ballpark estimate.

peterwall

I deal with the accountant and his staff regularly. They take my cash sheets, wages, etc etc and look after all my VAT and other obligations.

About 8 weeks ago, they asked me for my personal paperwork, interest certs, etc, etc and have now worked out my tax assessment at about 10k for this year. Plus the same for next year as preliminary tax.

My point is this.

Surely to god, they should have seen this coming and alerted me to the likely obligation that was coming.

Whats really getting me is getting hit completely out of the blue for 20k and not being prepared for it.

Surely someone should have warned me about this. Where the hell can I get 20k - just like that?

DoMyBooks

Again I wouldn't like to get into specific's but its worth having a serious look at the numbers. The first €10K I presume is your tax adjusted profit for 2009 and the 2nd €10k is likely your preliminary tax for 2010. Has anything changed between the two years? If it has its worth estimating your 2010 tax adjusted profit.

When you purchased the building was their no tax planning prior to purchase? Generally tax would be estimated at that point.

Generally when you engage an accountant you sign a letter of engagement. That states what the accountant will and wont do and what you are expected to look after yourself.

Hope this helps.

tedshredsonfire

I thought the best way of that lark was you rent the building to company and the profit from the rent goes to your pension tax free?

peterwall

tedshredsonfire wrote: »

I thought the best way of that lark was you rent the building to company and the profit from the rent goes to your pension tax free?

Dont laugh.

But I dont have one.

DubTony

peterwall wrote: »

Dont laugh.

But I dont have one.

HA! Join the club. It's a big one.

peterwall

DubTony wrote: »

HA! Join the club. It's a big one.

You have lost me, I do not know what you are talking about.

The estimate was 38k but the accountant has it down to 20k

DubTony

peterwall wrote: »

You have lost me, I do not know what you are talking about.

The estimate was 38k but the accountant has it down to 20k

Weren't you talking about a pension?

John368

Peterwall

Whether your accountant was negligent in not forewarning you of your tax liability here is debatable, but even if he was found to be negligent can you get him to pay the tax for you?

John

CompFix

How often do you speak/meet with your accountant?

dbran

John368 wrote: »

Peterwall

Whether your accountant was negligent in not forewarning you of your tax liability here is debatable, but even if he was found to be negligent can you get him to pay the tax for you?

John

No. The tax is the tax. He would have had to pay it anyway. Just because he is shocked at the amount he has to pay is not the fault of the accountant. Presumably he has calculated it correctly based on the information that you have given him. He advises when it is due to be paid so as there is no interest and penalties.

I take the point that he should have possibly mentioned that there was going to be a tax bill coming down the tracks due to the changes announced re rental income etc. This is bad customer care perhaps, but not neglegance.

If you arn't getting customer care then you should move.

Kind Regards


dbran