Accountant won’t give professional clearance with outstanding finance

Tom519

Hi all, first post here

I run a small online business and have been using my previous accountant for 2-3 years.

After my last set of accounts I was charge was in excess of 2k. For a small business this seemed alot so I l’ve looked elsewhere. I have now found a new accountant at a much cheaper price and she has requested professional clearance.

My old accountancy company is saying they will not do this as there is outstanding debt on last years accounts. I have used their offered finance company the last two years to spread their cost over 10 months. Never missed a payment, never had an issue.

I feel like I am now trapped with my old accountant until the bill is settled. The way I see it is the debt has been tranferred to the finance company and they have no right to stop me moving and giving professional clearance for accountancy services moving forward.

Is what they are doing allowed? The business is a sole trader business if this meaning anything.

Any advice would be great, Tom

martindow

I think if I was unhappy about an accountant I would settle the bill as soon as possible and move to a new one. Can you not pay off the remaining payments to the finance company?

Tom519

Hi Martin, I could but would need to look at any early repayment fees. I just wanted to know if what they are doing is legal.

Danipat

Surely, you owe the money to the finance company, it has nothing to do with the accountant. I dont think they can stop you, I would just move.

Pennywise

An unpaid debt isn't grounds for withholding professional clearance anyway assuming the old accountant is properly qualified/regulated by one of the main accountancy bodies.

Are you meaning the analyses of figures in the latest accounts/returns? That's different, and yes, the old accountant doesn't need to hand that information over until debts are settled, but the new accountant should be able to work it out anyway from your book-keeping etc.

Get your new accountant to write back giving chapter & verse re professional clearance, referring to the old accountant's professional body rulebook. Your new accountant should be helping you more with this and not just passing the buck back to you.

I'm assuming old and new accountant are properly qualified/regulated by a professional body - if not, then you can't rely on them following standard rules/conduct and they're pretty much free to do what they want!

Mistral001

The situation is that until you have settle your bill with present accountant, they have not been dismissed and are actually still your accountant. If another accountant takes you on as a client under those circumstances, they could be disciplined by their professional body for unprofessional conduct.

bengalknights

What does the terms of the finance state, was they self financing and so are wanting it all paid now?

trailingspouse

Over £2k does seem a lot for a sole trader. Before rushing to a cheaper accountant, I would be wanting to know why it's that high, and why it's (presumably) gone up a lot from previous years. You don't necessarily want a cheap accountant!!


If you are turning up with plastic bags full of scrumpled up receipts and expecting them to sort it all out and balance the books (some people do), then they will be charging more than if you have everything in order - they charge on an hourly basis, so the longer it takes, the more they charge. Are they doing things that you could do yourself - such as VAT returns, payroll? Are you contacting them a lot - again, they charge for dealing with queries. They act on your behalf, so you need to be fully aware of what they're doing and why.

Mistral001

trailingspouse wrote: »

Over £2k does seem a lot for a sole trader. Before rushing to a cheaper accountant, I would be wanting to know why it's that high, and why it's (presumably) gone up a lot from previous years. You don't necessarily want a cheap accountant!!
.

I hate to be pedantic, but I will! Sole trader does not mean one person business or even small business. Many sole traders have quite large businesses with dozens of employees and large turnovers in which case £2k would be quite reasonable.

trailingspouse

Mistral1001 - gosh, I hate being pedantic too. But the OP said he runs a 'small online business' - so £2k does seem a lot. Do you have any suggestions for him?

Pennywise

trailingspouse wrote: »

Mistral1001 - gosh, I hate being pedantic too. But the OP said he runs a 'small online business' - so £2k does seem a lot. Do you have any suggestions for him?

"Online" businesses can also be very problematic, especially for the likes of amateur ebayers, many of whom have very poor records. I can literally spend hour after hour sifting through Paypal downloads to extract meaningful information for clients who don't use properly-set-up software. Yes, £2k seems a lot, but I've a sole trader ebayer who I charge £3k - it would be a fraction of that if they did any book-keeping at all, but they're not interested, so £3k it is!