Accountants held accountable?

Hi there, I'm not sure if you can help but here goes..

Our accountants failed to inform the HMRC that our trading partnership changed to a Limited company in 2019 therefore, in the eyes of the HMRC we were still self-employed when the SEISS grants came out. We received a SEISS letter through the post stating we were eligible to claim SEISS so we claimed without realising we didn't actually meet the criteria for claiming. At the time we were in financial dire straits and didn't check the details properly. We simply thought that if the HMRC had written to us it was all okay so we claimed and managed to survive.

We now owe £26,000 back to the HMRC by the end of January 2022 but of course, we don't have it. Is there anything we can do to hold the accountants responsible for being negligent on our behalf? Or do we just suck it up and talk to the HMRC about some kind of payment plan?

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Comments

  • Savvy_Sue
    Savvy_Sue Posts: 47,111 Forumite
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    I agree with the above. The accountant has made a mistake but you're responsible for not spotting that they'd made a mistake.

    You're also responsible for failing to check the details of the SEISS grants. 

    Are you still with that accountant? Have you checked nothing else has been missed?
    Signature removed for peace of mind
  • Jeremy535897
    Jeremy535897 Posts: 10,710 Forumite
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    A repayment plan is a good idea, because ultimately it is your responsibility to ensure that you are entitled to claim SEISS grants, and you had to make the claim, but I would not give up on seeking some sort of redress from the accountants just yet. Perhaps the most important question is whether the accountants acted for you in a personal capacity (filing self assessment tax returns for example). Did you ever ask them about SEISS? What were they engaged to do regarding the limited company? Did they advise on the transfer of the partnership business to the limited company? Did they complete a partnership self assessment tax return for the year its business was transferred? Were they responsible for payroll? Did the company furlough anyone, including you? What did your letter(s) of engagement say?
  • agree with others the accountants may have made the error but it is you who is reponsable for making sure it is all correct. Informing HMRC & showing it was a genuine error will be best policy & repayment plan will worked out
  • Mistral001
    Mistral001 Posts: 5,397 Forumite
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    edited 30 December 2021 at 9:08PM
    If you consulted the accountant when you got the letter and they said that you should claim for the grant, then you might have a case, but you did not do this it would appear.  The self-employment and the Ltd company are two entirely different things.  Each are taxed differently.  The accountant will deal with them separately as well.  All they do is submit details of your profit each year when they recieve your accounts. 


  • Jeremy535897
    Jeremy535897 Posts: 10,710 Forumite
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    If you consulted the accountant when you got the letter and they said that you should claim for the grant, then you might have a case, but you did not do this it would appear.  The self-employment and the Ltd company are two entirely different things.  Each are taxed differently.  The accountant will deal with them separately as well.  All they do is submit details of your profit each year when they recieve your accounts. 


    That's why it is important to have the answers to the questions I asked. We don't know whether the accountants were engaged to advise the individuals or not, although if they advised on the transfer of the business to a company they presumably had some advisory role at least.
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    Also depends on the detail of the dates etc.  There is no actual requirement to tell HMRC of cessation of the partnership until the submission of the SA returns, so it's possible/likely the accountant has done nothing wrong, even moreso if the op didn't contact the accountant before claiming the seiss grants.  Accountants aren't mind readers.
  • Savvy_Sue said:
    I agree with the above. The accountant has made a mistake but you're responsible for not spotting that they'd made a mistake.

    You're also responsible for failing to check the details of the SEISS grants. 

    Are you still with that accountant? Have you checked nothing else has been missed?
    Yes we understand we are responsible but surely they are too - this is what we pay them for. We are in the process of moving to another accountant
  • A repayment plan is a good idea, because ultimately it is your responsibility to ensure that you are entitled to claim SEISS grants, and you had to make the claim, but I would not give up on seeking some sort of redress from the accountants just yet. Perhaps the most important question is whether the accountants acted for you in a personal capacity (filing self assessment tax returns for example). Did you ever ask them about SEISS? What were they engaged to do regarding the limited company? Did they advise on the transfer of the partnership business to the limited company? Did they complete a partnership self assessment tax return for the year its business was transferred? Were they responsible for payroll? Did the company furlough anyone, including you? What did your letter(s) of engagement say?
    Yes just a little acknowledgement from them that they made a mistake would be appreciated. They just keep coming back saying regardless of what has happened, ultimately we are responsible. We know that, but an apology wouldn't go amiss. Answers to your questions below;

    Perhaps the most important question is whether the accountants acted for you in a personal capacity (filing self assessment tax returns for example). 
    Yes they do all our returns for us.

    Did you ever ask them about SEISS? 
    No. We simply thought our prayers had been answered when the letter came through the door. Our mistake we know but at the time our business had ground to a halt and we had no income whatsoever.

    What were they engaged to do regarding the limited company?
    They did everything for us on our behalf. They dealt with the end of the partnership (apparently) and opened the new Ltd co.

    Did they advise on the transfer of the partnership business to the limited company?
    Yes

    Did they complete a partnership self assessment tax return for the year its business was transferred?
    Yes but they did not enter the cessation date on the tax return, resulting in the HMRC still having us down as a partnership at the time of SEISS grants being released

    Were they responsible for payroll?
    No, we just do an online submission to HMRC each month for the minimum amount

    Did the company furlough anyone, including you?
    No, we understood that if we were still doing a bit of work then we couldn't be furloughed. A friend told us that as we were still contacting our clients and cleaners (self-employed) with updates etc.

    What did your letter(s) of engagement say?
    With regard to? What they should do for us?


  • We understand we are responsible but there is a reason why we pay accountants to deal with everything on our behalf, because we are not accountants. We specialise in what we do and they specialise in what they do. Even if we looked over everything they do, I'm not sure an error would be picked up because we don't know what we would be looking for.

    We know now that we claimed wrongly but at the time, we didn't know and we didn't check. We simply trusted the government letter we received and thought we were super lucky (we are never lucky!). That was our mistake yes, but we can't help thinking that if the accountants hadn't made the mistake of not entering the cessation date on the tax return, we wouldn't be in this mess.


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