Company Books - Error by Accountant

andyward82

I'm probably in the wrong forum but hey ho.
I'm in the process of trying to buy a house. As part of the process because I'm self employed (Ltd Company) the vendors of the new house have asked me to go through a financial viability procedure. To do this I have to provide 3 years' books to their mortgage people. I asked my accountant for my books. She's provided them but upon looking at them it would seem my year 17-18 figures are WAY off. She's got me down as a certain amount of dividends and the real figure is nearly double that. So on paper she's made me look far less financially viable than I am. At the time I saw them (a year ago) I thought 'er, this doesn't quite look right - perhaps she's 'offset' some things and been a bit 'clever' to save me tax'. OF COURSE I understand in hindsight that perhaps I should have queried this but I know nothing of taxes and that kind of thing so I've placed my trust in the accountant to do her job properly.

Anyway, I've raised this with her and she's already sent me emails saying "you signed those figures off" so she's covering her back legally already. However, moving on I'd like to have this remedied. Does anyone know what can be done? I've sent her a full year's bank statement this morning highlighting my dividend payments to show how it would seem she's made an error. I'm hoping I can somehow get this rectified on record so I have a better chance of getting the mortgage I need.

Can anyone help? Please don't do the "you should have brought it up at the time and not signed it" - I know this now. I just want this situation rectified.

Thanks in advance
Andy

BoGoF

Did the company have sufficient profits to pay them as dividends? Perhaps your accountant has treated the withdrawals as debits to the Directors Loan Account?

What did you declare as dividends in your personal tax return?

You would be best finding your own mortgage broker.

babyblade41

You are an employee as you work for XXXXLtd

When you met with accountant didn't they explain how they had set out that years accounts ??

LandyAndy

I am in the same position. Last time I remortgaged I only had to produce my SA302's for the last three years.

00ec25

you are showing the classic signs of the confused company owner:
- you are not "self employed": you an employee of a company
- you are also the owner of that company: so you can choose how you pay tax

your accounts were prepared on the basis of tax efficiency so that you paid the least amount of personal tax

consequently your personal income for mortgage purposes is "low". that is not an accountants error, that is your accountant doing what you pay them to do, manage your tax

if you did not tell your accountant that you needed "high" income for mortgage purposes you can't expect them to be a mind reader and do it differently. It is the classic problem all accountants face when dealing with business owners. Your accounts are now a matter of legal record.

If you want 17/18 reopened it will cost you heavily in terms re-filing and paying extra tax + penalties for late declaration. You may end up doing what one of ours did and simply waiting 2 more years to allow accounts to be done to favour a mortgage, not reduce personal tax.

andyward82

Hi All. To try and reply to a few things in one go...
• She did my books and self assessment stuff and I'm pretty sure all that's filed off with me having the low income that she's calculated.
• I am trying to go through my own mortgage broker at the moment too - to try and do it on 1 years' books.
• For all intents and purposes (I always thought I WAS an 'employee') it would seem I'm self employed. This has happened when I've applied for loans and stuff in the past. On this specific case the broker asked me about my situation and then said I needed self assessment docs and full company books. I argued that I'm 'employed' by the company and I wouldn't have to get my employers' books if I worked for, say, British Gas. But no, she insisted she needed all the documentation.
• For 00ec25 - I am certainly a confused company owner. However, I actually think she's miscalculated somehow. She's got £719 in there for 'parking' and I've never charged anything like that to my account. The turnover she had for my company was WAY OFF too. I seriously doubt it's her managing my tax but we'll see what she says.
• Getting my SA302's isn't going to help my mortgage situation as this all ties in and she's filed them incorrectly as a result of the initial books...

AdrianC

andyward82 wrote: »

because I'm self employed (Ltd Company)

No, you're an employee and director of the limited company, as well as shareholder.

the vendors of the new house have asked me to go through a financial viability procedure.

The vendors? Not your lender? New-build?

To do this I have to provide 3 years' books to their mortgage people. I asked my accountant for my books.

You don't already have them?

She's provided them but upon looking at them it would seem my year 17-18 figures are WAY off.

You didn't sign them off?

She's got me down as a certain amount of dividends and the real figure is nearly double that. So on paper she's made me look far less financially viable than I am. At the time I saw them (a year ago) I thought 'er, this doesn't quite look right - perhaps she's 'offset' some things and been a bit 'clever' to save me tax'. OF COURSE I understand in hindsight that perhaps I should have queried this but I know nothing of taxes and that kind of thing so I've placed my trust in the accountant to do her job properly.

That is kinda why you employ her...

Anyway, I've raised this with her and she's already sent me emails saying "you signed those figures off"

And did you?

However, moving on I'd like to have this remedied. Does anyone know what can be done?

Umm, it can't. It's already lodged with Companies House. You've already paid income tax and corporation tax based on the figures you signed off. You wouldn't be "remedying" it, you'd be changing legal documents after the fact because you realised that you want to provide a better gloss.

Remember - Salaries are paid to staff before profit is declared, and the staff pay income tax on it. The company pays corp tax on the profit. Dividends are paid to shareholders from post-tax profit, who pay tax on them. You're trying to rejig the already paid-signed-off-and-filed tax on all of those.

I've sent her a full year's bank statement this morning highlighting my dividend payments to show how it would seem she's made an error.

Never mind what payments you think were dividend and what were salary - do the company's bank statements add up with the accounts? If not, you've got an even bigger problem.

davidmcn

andyward82 wrote: »

the vendors of the new house have asked me to go through a financial viability procedure

Are you sure you don't mean "the vendors' estate agents are trying to make as much money as possible out of everybody involved, and are now trying to sell me a mortgage"?

andyward82

I'll try and reply to you AdrianC
1. I understand all that but she said 'for all intents and purposes in this case you are self employed'
2. Yes, it's a new build. They won't even send anyone round for the PX with my house until I've passed financial viability.
3. I had them but I asked for the very latest year - the one just gone. So asked for her to re-send the last two and prepare the new one.
4. I did sign them off yes. Stupid i guess but I trusted her to know what she was doing.
5. Yes, this is exactly why I employ her. I'm a designer. I'm terrible at maths and paperwork so I rely on people like her to ensure I'm paying my taxes and doing everything legally.
6. Yes, I signed them.
7. All understood.
8. My company bank accounts seemingly don't add up to the accounts. Like I mentioned, the turnover is WAY OFF.

I've literally just had this email from her.

"Regarding 2016 - 2017 That is the figures that was in your paperwork for last year also what you signed off in your company accounts and also what you signed off in your Self assessment.
If it is wrong why did you sign it as correct twice"

I understand that I have seemingly signed off incorrect accounts but how can this be fair? It's like an architect coming to me with some drawings and asking my to sign off the structural integrity of the building. I haven't a clue about that, nor do I have a clue about tax and self assessment and VAT and that kind of thing.

Any ideas of what I can do now?

andyward82

davidmcn wrote: »

Are you sure you don't mean "the vendors' estate agents are trying to make as much money as possible out of everybody involved, and are now trying to sell me a mortgage"?

No, for me to go ahead and reserve the plot they need a financial report. Or people could potentially just hold plots for £200 a month until they've saved a deposit. I can go source my own (which I am) but this problem arose...

[Deleted User]

You will have to go back to your original receipts and check the figures she has, in case there is an error.

But I do agree, my ex is self employed, paid a ridiculously small amount of tax, which is great this year, but when he wants to do anything credit wise, it will hurt him, badly but he won't listen to me lol.

I'm afraid while you have an accountant and should be able to trust them, for your own sake, you do have to check things carefully. In my ex's case, I put his expenditure on a monthly spread sheet so figures could be checked. Professionals can get things wrong (even had a solicitor who made a complete balls up of the deposit we needed to pay on a house many moons ago). Its unfortunate, but as a businessman, you can't trust anyone, I'm afraid. You are employing them as professionals but the responsibility still lies with you ultimately. For self protection if nothing else.

To put things in perspective, if you had some monthly expenditure figures, it would only have taken you a few hours to check the accounts. I'm not having a go.., just trying to make you see its not that hard to check things.

You may have to wait on home ownership until your figures are a bit more helpful.