Account has messed up my stock levels, HELP !

mike3000

My accountant has for the last 4 years messed up my stock levels.

I trade in heavy plant and machinery and for some reason he has some stock showing as both sold and still on the books, sometimes twice !
Even though i use a stock number for each item.

What are the implication on tax as i have been telling him for a while i am paying too much, but it was only recently i discovered what he was doing with my stock.

Obviously i have items showing in stock which are already sold, this i assume will mess up income as it will show as profit once he removes it, and in the past years has already done so.

ALL advise welcome.

Cheers

Mike

WHA

If the stock items have been sold and are still shown as closing year end stock, then your profits have been too high in the past. When the items are removed from the current year's closing stock, a correction will occur to take out the double-counted stock, balancing your earlier years excess profits with a corresponding reduction in current year profits. If the figures are big, you probably need to revise the previous years accounts and submit correcting tax returns. If the figures are relatively small given the bigger picture, an adjustment in the current year is OK and no need to revise previous. The effect is that you have probably paid too much tax on the wrongly inflated profits, but that can be corrected. Sounds like time to get another accountant - one who understands your business!

Bean_Counter

Are you registered for VAT? Have any of these errors resulted in a VAT error greater than £2,000?

longforgotten

If he's made a mess of your stock, best check if he's got your debtors and creditors right at the year end too ?

mike3000

Bean_Counter wrote: »

Are you registered for VAT? Have any of these errors resulted in a VAT error greater than £2,000?

I had started to do my own VAT return about a year ago, but the figures he submitted in the past were only ever a few quid different to mine.
Thats why i did it myself in the end as i thought it not worth the £50 or so he charged for the VAT return.

mike3000

The other thing is he said my books balance to the penny!

I cant see how they can if my stock has been counted twice on some occasions and also been sold.

mike3000

longforgotten wrote: »

If he's made a mess of your stock, best check if he's got your debtors and creditors right at the year end too ?

Might sound daft, but really dont know where to start with that.

I assume it is just a list and a final figure of who i have not paid, and the same for who has not paid me but is invoiced in the accounting year.

Bean_Counter

mike3000 wrote: »

The other thing is he said my books balance to the penny!

I cant see how they can if my stock has been counted twice on some occasions and also been sold.

The reason that the books will balance is that the whilst your stock levels will be too high, your profit will be overstated by a corresponding amount, hence the books will still balance.

I would agree with WHA - consider another accountant.

How far back do you reckon the errors go?

mike3000

I have been considering another accountant for a while.

Thought i would get my head round this before leaving.

He has sugested reducing the stock by £5k this year and a bit more next, i assume this is to cover is error without looking obvious. This is no where near the figure he over valued by this year let alone last year and probably the 2 prior to that (have not cheacked the figures yet, only assume he did the same then as he did for the last 2)

So all in all i reckon 4 years with over value for the last 2 alone being £12k each year. But would the last year be the only year affected?