Recourse against accountant

[The Trade Winds]

Like others on here I have left Nixon Williams owing to the recent outages and moved to a new accountant. The problem I have is that NW are not replying to the professional clearance request from my new accountant and are not responding to any calls or emails - I am just getting an autoreply email. I also have work that need to be done - I've already had a warning letter from Companies House telling me my company is under threat of being struck off owing to late submission of accounts (due 31 Dec, not yet submitted).

Is there any possible action I can take to get them to pull their fingers out? Is it worth contacting HMRC myself to explain this situation?

[Lance]

Is there any possible action I can take to get them to pull their fingers out?

Not really. Get your new accountant on the job. Don't let them delay waiting for information. Tell them to get on with what they have. You have copies of all invoices/statements don't you? Start getting them in Freeagent for the previous year (your new accountant does have FreeAgent doesn't he?)

Is it worth contacting HMRC myself to explain this situation?

Absolutely. Should have been done months ago IMO.

[The Trade Winds]

Not really. Get your new accountant on the job. Don't let them delay waiting for information. Tell them to get on with what they have. You have copies of all invoices/statements don't you? Start getting them in Freeagent for the previous year (your new accountant does have FreeAgent doesn't he?)

Absolutely. Should have been done months ago IMO.

The new accountant won't do anything at all until he's had a response to the professional clearance request

[Fred Bloggs]

The new accountant won't do anything at all until he's had a response to the professional clearance request

Find one who will sort it out for you rather than just give you lame excuses. Like do it today.

And...... this is the perfect illustration why everyone should be running their company on FreeAgent. Then this kind of stuff simply won't happen.

[Maslins]

The new accountant won't do anything at all until he's had a response to the professional clearance request

There's two separate sides to what's refered to as "professional clearance":
1) the perhaps archaic "old boys network" type thing. The new accountant asks the old one if there's any professional reason why they shouldn't accept the appointment.
2) transfer of information. As others have alluded to above, this is less critical if someone's data is all on FreeAgent/similar, but even then it's useful. FreeAgent typically won't have all the data.

The first bit, accountants don't strictly need. Realistically it's a courtesy, nothing more. The new accountant will have to do some of their own checks anyway, in terms of things like anti money laundering etc.

The second bit, it can be a PITA if this isn't forthcoming. Your new accountant needs lots of information to be able to advise you properly.
If:
- your data's on FreeAgent,
- that data tallies nicely with the formal submissions made to HMRC/Companies House, and
- you're pretty savvy yourself (eg know your various company references, and understand what things like odd balances in your accounts represent,
then the old accountant not providing anything shouldn't be a problem. However, if any of the above don't apply, it's a royal PITA for the new accountant. They'll need to do a fair bit of detective work, combined with getting you as client to do multiple tasks, in an attempt to piece together the situation. Annoying for all concerned...but the sad reality is there's negligible negative consequences on the "old" accountant for not assisting.

Going back to the OP, what can you do?
- you can complain internally to the previous accountant. Try to get it escalated. If they ignore this it won't achieve much.
- if they're regulated by one of the main accounting bodies, you can complain to them. In practice most of the big contractor firms aren't, so this option often isn't open to you.
- you can kick up a stink publicly. Complaining on social media. Negative reviews etc. Be careful to be factual to minimise risk you get in hot water.
- I wonder if you might have a case to take them to the small claims court. You'd need to be able to evidence financial loss to you by their failings. This could perhaps be trying to reclaim fees on the grounds you paid for a service you didn't receive (though take care here as it's likely they did provide some level of service). Perhaps claiming any financial penalties from Cos Hse/HMRC as being due to their negligence. Possibly even claiming the new accountant's fees for doing work you'd paid the old accountant to do.

I do think a problem is enough people don't do anything following departing accountants who provided terrible service. So that firm basically got paid plenty of money to do very little, with no consequences. Other firms have to pick up the pieces, whilst finding the whole industry's reputation is tarnished.

[The Trade Winds]

There's two separate sides to what's refered to as "professional clearance":
1) the perhaps archaic "old boys network" type thing. The new accountant asks the old one if there's any professional reason why they shouldn't accept the appointment.
2) transfer of information. As others have alluded to above, this is less critical if someone's data is all on FreeAgent/similar, but even then it's useful. FreeAgent typically won't have all the data.

The first bit, accountants don't strictly need. Realistically it's a courtesy, nothing more. The new accountant will have to do some of their own checks anyway, in terms of things like anti money laundering etc.

The second bit, it can be a PITA if this isn't forthcoming. Your new accountant needs lots of information to be able to advise you properly.
If:
- your data's on FreeAgent,
- that data tallies nicely with the formal submissions made to HMRC/Companies House, and
- you're pretty savvy yourself (eg know your various company references, and understand what things like odd balances in your accounts represent,
then the old accountant not providing anything shouldn't be a problem. However, if any of the above don't apply, it's a royal PITA for the new accountant. They'll need to do a fair bit of detective work, combined with getting you as client to do multiple tasks, in an attempt to piece together the situation. Annoying for all concerned...but the sad reality is there's negligible negative consequences on the "old" accountant for not assisting.

Going back to the OP, what can you do?
- you can complain internally to the previous accountant. Try to get it escalated. If they ignore this it won't achieve much.
- if they're regulated by one of the main accounting bodies, you can complain to them. In practice most of the big contractor firms aren't, so this option often isn't open to you.
- you can kick up a stink publicly. Complaining on social media. Negative reviews etc. Be careful to be factual to minimise risk you get in hot water.
- I wonder if you might have a case to take them to the small claims court. You'd need to be able to evidence financial loss to you by their failings. This could perhaps be trying to reclaim fees on the grounds you paid for a service you didn't receive (though take care here as it's likely they did provide some level of service). Perhaps claiming any financial penalties from Cos Hse/HMRC as being due to their negligence. Possibly even claiming the new accountant's fees for doing work you'd paid the old accountant to do.

I do think a problem is enough people don't do anything following departing accountants who provided terrible service. So that firm basically got paid plenty of money to do very little, with no consequences. Other firms have to pick up the pieces, whilst finding the whole industry's reputation is tarnished.

Thankyou - some useful info there. Unfortunately they do not respond at all to communications - I am being completely stonewalled and they don't seem to care about the negative commmments I've made on social media - no response there either. The real bummer is that they still have to do my 21/22 accounts as I've paid up for that year but haven't even filed the 20/21 accounts so I'm thinking it's never going to happen & I'm going to have to stump up again for another accountant to do that year so, yes, small claims court will definitely be a routs I'm tempted to take.

[Maslins]

The real bummer is that they still have to do my 21/22 accounts as I've paid up for that year but haven't even filed the 20/21 accounts so I'm thinking it's never going to happen & I'm going to have to stump up again for another accountant to do that year so, yes, small claims court will definitely be a routs I'm tempted to take.

My limited understanding of the legal side (I am not a solicitor etc) of this:
- you should make efforts to minimising your own losses. Sounds obvious...but if you're planning to claim from the other side, temptation can be there to allow costs to escalate. This is frowned upon and may reduce damages awarded even where you win.
- you must therefore balance not allowing Companies House late filing penalties to escalate (they grow quickly), but also not jumping to pay some other super expensive accountant to do the work ASAP when hypothetically your existing accountant may have been on the brink of completing them.
- whilst phone calls can be better than emails to chase to get things done, emails have the benefit that there's a clear trail, showing your multiple attempts to get your existing accountant to do what's asked. Where you do call, make notes of the time and date, and if you do speak to anyone there, their name/what was discussed.
- don't jump to lodge the small claim. Ensure you've given your existing accountant plenty of warning. This should include a final "letter before action" (if you're not familiar with this, Google it, you can find a nice summary of key things to include) which you'd send recorded delivery, minimise risk of them arguing they never got it.

Best of luck with it all. I'd be interested in how a small claim challenge for this kind of thing turned out.

[Fred Bloggs]

One thing that strikes me here, OP seems to me to have let things escalate to a point where OP is close to having two years company filings overdue? If I have understood correctly, that is. It's absolutely the OP's responsibility as company officer to ensure all filings are correct and on time. No blaming an accountant. In my humble opinion, the OP needs to forget about everything else until the company filings are completed and filed with urgency.

Then start to think about what else to do.

If the OP has signed up with another sausage machine "contractor specialist" I think a change in direction is required. OP needs to speak to an accountant today and engage that accountant to proactively plan how to sort out the mess. It's going to cost money, but that's the price of letting stuff get out of hand. Myself, I would pick up the phone this morning. There's an accountant already responded to this thread.

[Maslins]

One thing that strikes me here, OP seems to me to have let things escalate to a point where OP is close to having two years company filings overdue?

I think the 2020-21 ones have filing deadline due imminently. The OP is making the point that in the multiple months since that year ended and awaiting accountant to do year end figures for it, they've been paying that same accountant monthly fees towards the 2021-22 accounts. Ie the latter ones certainly aren't late yet, not even close to it...but they've paid a large chunk of the fees for them to be done, with a big question mark over whether they'll get any of the work they have paid/are paying for done.

[Fred Bloggs]

I think the 2020-21 ones have filing deadline due imminently. The OP is making the point that in the multiple months since that year ended and awaiting accountant to do year end figures for it, they've been paying that same accountant monthly fees towards the 2021-22 accounts. Ie the latter ones certainly aren't late yet, not even close to it...but they've paid a large chunk of the fees for them to be done, with a big question mark over whether they'll get any of the work they have paid/are paying for done.

Fully understood. But any redress against the sausage machine accountant is secondary to sorting the mess out that the OP is in. Once that's sorted, then consider any redress. I suspect there won't be any.