Reminders about paying tax from your accountants

[kilburnpup]

Hi,

Just a question about what is good practice for accountants.

I received an email from my accountants in Oct 2018 around six months prior to the deadline in April 2019.

I was busy that time and it was from an operative I didn't know so I didn't even notice the email in amongst the many others in my inbox.

They did not seek to obtain a confirmation that I had received or read their letter.

They did not send any further correspondence or reminders.

They have now contacted me saying I owe HMRC the tax plus interest.

I asked why interest and they said because the payment is late.

They have full access to my bank transactions but more importantly did not even know if I was aware of what tax I needed to pay at what time.

When I asked them about this they explained it is the company policy not to obtain confirmation on any correspondence to save time.

Is this good/best practice for an accountant?

I am, as most contractors, a one man band and I have made it clear I rely on my accountants to keep me straight with HMRC so I can focus on fee earning and developing/maintaining my freelance work.

Would be interested to have your views on this..

Cheers

[northernladuk]

You admit they chased you and you ignored/didn't read the email. They can't keep checking to make sure you've received mails etc. That's a big ask really.

They might have sent another I guess but don't see that would make them at fault. It would make them look more helpful but the lack of it doesn't make them unprofessional or to blame though.

You are a director of a limited company and you get all the benefits of it. It does however come with legal financial responsibilities and that includes having a basic clue of tax deadlines and managing the money.

It's also not for an accountant to check your bank or your awareness of tax laws, although I don't know why that's an issue as they did send you a reminder so that statement you made is wrong. They offer you an accounting service to do your books, not run your company for you.

What I do think is maybe you've got the wrong accountant for what you need. If you want a service where you can see absolutely everything and it's laid out bare for you then you need one that offers you Freeagent. In there you can see exactly when the year end is and when the payment is due. The type of accountants that offer contractor service plus Freeagent may be a little more helpful as they will be more used to dealing with people who don't know or don't care about tax law. The one's I've seen send plenty of communication out to help you along so I'd say you've got the wrong type of accountant.

I can't help thinking this is only one side of the story but I got totally screwed over by a one man band generalist accountant in my early days and the story you tell sounds like the way he operated.

I think you've got to swallow most of the blame here, it's up to you ultimately. You can't expect to have it all done for you. You can, however, look around for a different accountant that offers you something closer to the service you actually require.

You could of course speak to your provider and if you handle it properly they may offer to help with the interest. Happened to me and I've seen it mentioned on here a few times. These were in situations where the accountants accountants fault to be fair but they may fold to keep business going.

[malvolio]

Someone else who hasn't realised that his job is being a contractor. What you do to earn income for YourCo is secondary.

[DeludedKitten]

FreeAgent gives me notifications on my phone, and puts things in my Google calendar so that I don't forget things like this.

Personally, I'd be worried if my accountant was going through my bank accounts and looking at where every transaction goes on a regular basis.

They told you to pay, you didn't pay - not much more to it than that.

[man]

I think you need to remember one crucial thing if your thinking is along the lines you've suggested - you, as a director are responsible for your company. Not your accountant. The reason I'm making a point of this is that even if your accountant bang to rights messes up, you are held completely responsible for it. Sure, you can try to chase accountants that have done wrong (not in this case as it sounds like you dropped the ball), but you as a company director are responsible for anything your service supplier(s) or subcontractor(s) do wrong and that needs to affect your decision making and due diligence.

In other words, if you have expectations on your suppliers (e.g. chasing you up etc), you need to make those expectations clear, get agreement from them to meet those expectations and monitor their performance (not blindly trust) and be prepared to kick them to the curb if they aren't a good fit for what you need. As has already been mentioned, there are a number of accountants very willing to help newbie directors for a price.

Accountants vary enormously in the service they provide, just like a lot of skilled trades.

It may be a disproportionate level of overhead, but if you want to trade these are the rules.

[Lance]

Look for an accountant called Darren Upton. Give him your bank details and he’ll handle it all for you. Other than that, you need to take some responsibility to fulfil your obligations.

HTH

[fiisch]

You didn't action an email from your account. Borderline incompetence. They've given you the message, you should be big enough and ugly enough to do the needful yourself without reminder. If you're paying typical accountancy rates, you're not paying nearly enough for the sort of hand holding you're asking for.

I am not paying tax as and when I am getting notified at the moment (a whole other story), but I make damn sure I've got multiple calendar reminders on the run up to and the due date so that I don't miss the deadline. It's not difficult - you dropped the ball on this one, your accountant has done nothing wrong.

[simes]

Sorry Kilburn,

Agreed with all that has been said above. You didn't action an email, don't have reminders in place, and have veritably dropped the ball.

Need to sharpen up a bit.

[Cid]

Freeagent keeps a time line and estimated costs.

[jmo21]

FWIW, my agent will send multiple reminders to me with increasing font size and red text to remind me to send them things they need to do their work on time.

However once my accounts/vat/personal tax have been submitted and I have been notified once of the sums to send out, that's it.