Form 17 never submitted - accountant negligent?

xenicuslongpipe

Hi all,

We own a single BTL and have since 2016. I'm a higher rate tax payer, my wife is a basic rate. We had a declaration of trust drawn up stating she owned 99% and I owned %1.

We hired an accountant to do our taxes that year as we frankly didn't know what we were doing. The accountants were not great and as a result we started doing our own returns in subsequent years.

Doing our returns this year I came across the need for Form 17 and suddenly got a sinking feeling that it probably never been submitted. I called HMRC and this is indeed the case, so we likely now have to go back and pay tax assuming a %50 %50 split for the last 5 years.

Should the accountant have done this?

I'm already resigned to having to pay the retroactive tax.

pjcox2005

It probably depends on how it was presented to the accountant and what services you engaged them to undertake. 

If they weren't involved in the declaration of trust and you presented it to them as 99%/1% already being the tax position then they may have assumed you had filed form 17 and prepared on that basis. They probably should have gone further i.e. asking you to confirm, but they aren't necessarily being paid to verify all information but instead prepare tax returns on the basis of information provided (e.g. they wouldn't do land registry searches or overseas checks to confirm you've told them about all properties.) 

If they were involved in the split of ownership between your wife and yourself, and you asked for help with all relevant filings including form 17 then yes they clearly should have completed that task.

xenicuslongpipe

pjcox2005 said:

If they weren't involved in the declaration of trust and you presented it to them as 99%/1% already being the tax position then they may have assumed you had filed form 17 and prepared on that basis. They probably should have gone further i.e. asking you to confirm, but they aren't necessarily being paid to verify all information but instead prepare tax returns on the basis of information provided (e.g. they wouldn't do land registry searches or overseas checks to confirm you've told them about all properties.) 

Appreciate your response

 We presented 99%/1% as the ownership position. I can see that in the email I sent them. It isn't clear to me that necessarily corresponds to the tax position though.

Jeremy535897

While I would hope that a good accountant would have thought to ask the question, I don't think that you have an open and shut case for negligence on their part. You could always ask them why they didn't check that a Form 17 had been filed, I suppose.