Advice re disagreement with accountant's fees

Caucasian Ovcharka

Apologies for jumping in on this [edit, new thread started, smcgiff] but my own issues seem to be specifically related and my previous posts on it are not receiving much help:

I met my accountant in jan 2012, we discussed fees and agreed on 960 including vat to do the vat, business returns and income tax for the year etc.

That was fine until one matter confused things and resulted in the current debacle.

1st part of misunderstanding between accountant and me:

The accountant ask me to pay this 960 by means of a direct debit and by doing so this would facilitate him as my accountant for all accountancy tasks and I can call for advice whenever needed etc. I said great and agreed.

I had prepared my returns for 4 months of 2011 as there was not much to them and had intended to do them myself but when I asked the accountant on advice doing this he said give them to him to do. Great again!

I paid the direct debit each month for 2012 and for the current 3 months of 2013.

Business circumstances changed and so I wanted to end the business as it was not good and restart in another more successful branch of it as a new business. So I asked the accountant if we could finalize the accounts for the business and restart as another business.

He said no problem and I submitted a spread sheet and all relevant monthly documents, there was only a loss and no profit so no income tax. All vat was done by myself on line.

So I had paid him 15 months of a direct debit and then I received a call stating that he would need payment of nearly 650 to submit the accounts???

I said I had paid for the accounts service for the returns for 2012 by the direct debit taken in 2012 and he said NO! all the direct debits taken in 2012 only paid for the cost of the filing of returns for the 4 months of 2011!!!!!

I was shocked by this??

Can anyone advise me I can see where the confusion lies and aired my concern with the accountant and offered to meet him half way but NO he wants full payment or he will not do the returns!!!


So I'm genuinely at a loss here any advice would be appreciated

Caucasian Ovcharka

Caucasian Ovcharka wrote: »

Apologies for jumping in on this but my own issues seem to be specifically related and my previous posts on it are not receiving much help:

I met my accountant in jan 2012, we discussed fees and agreed on 960 including vat to do the vat, business returns and income tax for the year etc.

That was fine until one matter confused things and resulted in the current debacle.

1st part of misunderstanding between accountant and me:

The accountant ask me to pay this 960 by means of a direct debit and by doing so this would facilitate him as my accountant for all accountancy tasks and I can call for advice whenever needed etc. I said great and agreed.

I had prepared my returns for 4 months of 2011 as there was not much to them and had intended to do them myself but when I asked the accountant on advice doing this he said give them to him to do. Great again!

I paid the direct debit each month for 2012 and for the current 3 months of 2013.

Business circumstances changed and so I wanted to end the business as it was not good and restart in another more successful branch of it as a new business. So I asked the accountant if we could finalize the accounts for the business and restart as another business.

He said no problem and I submitted a spread sheet and all relevant monthly documents, there was only a loss and no profit so no income tax. All vat was done by myself on line.

So I had paid him 15 months of a direct debit and then I received a call stating that he would need payment of nearly 650 to submit the accounts???

I said I had paid for the accounts service for the returns for 2012 by the direct debit taken in 2012 and he said NO! all the direct debits taken in 2012 only paid for the cost of the filing of returns for the 4 months of 2011!!!!!

I was shocked by this??

Can anyone advise me I can see where the confusion lies and aired my concern with the accountant and offered to meet him half way but NO he wants full payment or he will not do the returns!!!


So I'm genuinely at a loss here any advice would be appreciated

You need to determine what exactly it is you agreed with your accountant and what exactly you paid him for. Do yo have a letter of engagement?

Caucasian Ovcharka

Thanks for your reply, I have requested the information but I know this is not going to resolve anything as he is adamant!

But does any of my overview seem to point to misgivings on his part i.e. I have been paying by dd every month of 2012 to cater for 4 months of accounts of 2011???

smcgiff

Are there two accounting periods here?

Was it 960 for one year and 650 for the second year?

Just because there's no income tax doesn't mean accounts and tax return don't need to be prepared and returned.

Caucasian Ovcharka

Caucasian Ovcharka wrote: »

Thanks for your reply, I have requested the information but I know this is not going to resolve anything as he is adamant!

But does any of my overview seem to point to misgivings on his part i.e. I have been paying by dd every month of 2012 to cater for 4 months of accounts of 2011???

Nothing in your post seems to suggest any "misgivings". Without a letter of engagement it would be very difficult to prove your accountant has done anything wrong.

Caucasian Ovcharka

This is why I'm seeking advice as there seems to be a multitude of odd business practices confronting me here but maybe this is just the nature of the accountancy business and I genuinely need someone outside of the debacle to explain this to me that I'm not actually been duped but rather just a victim of bad communication.

Is it not odd practice to have a client pay a direct debit for the 12 months of 2012 to cater for accounts service for 2011? I was told this dd covered real-time accountancy service to cater for on going accountancy service! This was the deal clincher for me I thought is was a good way of offering the service to a small start-up business.


There was no expenses for accountancy applied to the returns for 2011??

First mention of this costing is in march 2013??

even the first draft return for 2012 has accountancy fees at 960 then the second draft return a week later has the figure doubled??

when asked for an explanation we are told that the 960 is for a 1 yr accounts return whether its 1 week in total or 52 wks??

I'm been held over a barrel as my accounts wont be filed unless I pay the additional amount??

960 for 4 months of 2011
960 for 12 months of 2012

So I'm at a loss as I feel that I've been taken for an expensive ride??

smcgiff

Caucasian Ovcharka wrote: »

This is why I'm seeking advice as there seems to be a multitude of odd business practices confronting me here but maybe this is just the nature of the accountancy business and I genuinely need someone outside of the debacle to explain this to me that I'm not actually been duped but rather just a victim of bad communication.

Is it not odd practice to have a client pay a direct debit for the 12 months of 2012 to cater for accounts service for 2011? I was told this dd covered real-time accountancy service to cater for on going accountancy service! This was the deal clincher for me I thought is was a good way of offering the service to a small start-up business.


There was no expenses for accountancy applied to the returns for 2011??

First mention of this costing is in march 2013??

even the first draft return for 2012 has accountancy fees at 960 then the second draft return a week later has the figure doubled??

when asked for an explanation we are told that the 960 is for a 1 yr accounts return whether its 1 week in total or 52 wks??

I'm been held over a barrel as my accounts wont be filed unless I pay the additional amount??

960 for 4 months of 2011
960 for 12 months of 2012

So I'm at a loss as I feel that I've been taken for an expensive ride??

I thought you said it was 650 for the second year. Even if it's only four months - 650 doesn't seem excessive.

Caucasian Ovcharka

sorry I seem to be struggling to communicate this clearly

960 for 4 months of accounts returns for 2011 paid over 12 months of dd in 2012

960 for 12 months of accounts returns for 2012 paid with 4 months dd in 2013 plus the balance demanded roughly 650

nomunnnofun

Hi, seems to be a mis-communication to me:(. Based on your info, it seems to me that the 960 is for accounts for a year and you were always paying a year in arrears. This would not be uncommon in accountancy practices as often when you approach a client to pay for current year by direct debit, they don't like the idea of paying every month for work that will not be actually done for 10 months. As mentioned before, this should have been made clear from the start with a letter of engagement but the prices seem pretty reasonable to me, so IMHO, you are not being conned. Obviously only my understanding though.

Caucasian Ovcharka

Thanks for your response, its reassuring to get some third party input on this so it appears to be a complete miscommunication given that such practices are common place.

Its strange that after a year and a half this has only come to light. Nevertheless, its hard to swallow an additional 960 that I did not know I had to hand over until last week especially after I just deregistered for VAT surely he could of told me this before hand to lessen the expense??

barneystinson

It's very clear what went on here.

No accrual for 2011 accounts, and the fact that the 2011 accounts were only mentioned as an afterthought, indicates that the accountant was happy with the fee they'd agreed and had no problem at the time with doing 2011 as part of the first year's work.

Things changed when he realised his handy income stream from the client is stopping and he's now chancing his arm to gouge a few quid extra.