Accountant Issued incorrect payment Accountant Issued incorrect payment
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  1. #1

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    Default Accountant Issued incorrect payment

    Hello All,

    Wondering if you can help me with some advice on the below situation -

    My accountant issued me with a CT rebate refund (large amount) in February of this year. I deposited the cash into my company account and used the funds for my use. Subsequently, in July, accountant calls me and mentions that the payment was issued in error so I/my limited company has to make a payment back.

    In the meanwhile, as planned (prior to Feb), I have started the process to close my limited company as I knew I will not trading from April of this year. My accountant also knew about that.

    In the middle of processing my final accounts, my accountant has started to demand the incorrectly issued payment. On probing the accountant further, I understand that the accountancy firm has been managing two companies with a similar name. So when requesting CT from the other company, they have incorrectly put my company's ID which meant the other company has made payment against my company ID. Given that my company is up to date with payments, HMRC automatically issued a refund for the amount which came straight through to me.

    This is a school-boy error by the accountancy firm which they did admit to.

    Now the accountant is asking me to make the payment to HMRC to clear the error payment and then go into debt management (as I am not trading anymore so no fresh funds coming into the account) to clear my own company closure liabilities.

    I firmly believe, that the accountancy firm must take ownership and settle the matter with HMRC.

    Also, as part of the final accounts, the accountant has added the error payment to my director's loan account, which means I personally will be liable for taxation.

    What are my options here? Any recommendation?

    Thank you.

  2. #2

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    You say you used the funds for your use. Does this mean personally? If so then that’s why it was added to your DLA.

    Sounds like a right mess. But I bet they’ve covered themselves in your contract with them. Usually the buck stops with you.

    However this is a major cockup so would be nice to know who the accountant is.

    As it’s a sizeable amount. Did you not realise that it maybe wrong and run the figures yourself.

  3. #3

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    Hey Dude

    Any chance you could tell us the first letter of the accountancy firm?

    Mine made a stupid mistake too. I was on an inside IR35 contract, had been for months, and they processed/reported a salary payment as being a dividend. In the end I had to treat it as if it had been a directors loan.

  4. #4

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    Quote Originally Posted by PTP View Post
    Hey Dude

    Any chance you could tell us the first letter of the accountancy firm?

    Mine made a stupid mistake too. I was on an inside IR35 contract, had been for months, and they processed/reported a salary payment as being a dividend. In the end I had to treat it as if it had been a directors loan.
    From retained profits from before you took the IR35 gig I assume?
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    Do either of you have Freeagent? Could either of these situations have been avoided if you were on it? Genuinely interested.
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  6. #6

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    Quote Originally Posted by MrButton View Post
    You say you used the funds for your use. Does this mean personally? If so then that’s why it was added to your DLA.

    Sounds like a right mess. But I bet they’ve covered themselves in your contract with them. Usually the buck stops with you.

    However this is a major cockup so would be nice to know who the accountant is.

    As it’s a sizeable amount. Did you not realise that it maybe wrong and run the figures yourself.

    Thank you for the response.

    Funds were used for paying pensions+dividends+salary.

    With hindsight, yes, I should have questioned where the money is coming from?

    Is there a legal route that I can take here?

    As the case is ongoing, as you will appreciate it is sensitive to add any more details with regards to the accountancy firm.

  7. #7

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    Quote Originally Posted by PTP View Post
    Hey Dude

    Any chance you could tell us the first letter of the accountancy firm?

    Mine made a stupid mistake too. I was on an inside IR35 contract, had been for months, and they processed/reported a salary payment as being a dividend. In the end I had to treat it as if it had been a directors loan.
    Thanks for the response.

    As the case is ongoing, you would appreciate that it is sensitive to name the accountancy firm.

  8. #8

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    Quote Originally Posted by contractDudeUK View Post
    I firmly believe, that the accountancy firm must take ownership and settle the matter with HMRC.
    Are you saying you want the accountant to pay it back?

    It's a pretty bad error to be sure, but I'd be surprised if the accountant will swallow a large amount like that.

    Have you now spent the money personally?

  9. #9

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    There is no way the accountant will pay it.

    It is an error, but you still received money that wasn't yours, so it should be paid back.

    Did you not think to question why you had received such a large repayment? You don't normally receive repayments out of thin air.

    Best you can hope for is to agree a repayment plan with HMRC. Although the accountant made the error by giving wrong payment details, it is not up to him to collect money.

    You have received the funds in error and you should repay them.

  10. #10

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    As a Director of YourCo. it is ultimately your responsibility for all the Company matters. Financial, Fiduciary, Legal and Contractual.

    Although your Accountant has made a mistake, the fact that you transferred the funds to your Personal Account was your decision. You will have to take a personal loan, pay the Corporation Tax o.b.o. YourCo. if you don't have the funds, and want to wind up the Company.

    It's a bitter pill to swallow, and most people seem to forget their Corporate responsibilities, or enter into that world out of ignorance.
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