Dodgy Accountant and corporation Tax

[trailanderror]

Hi there

I am a newbie on here so hello from me

I have a question I hope you can answer for me if your could - please help me

We have had the same Accountant since 2007. About a year ago we decided to shut down our 'old' company, and re-open another one. The current one has been running for 1 year, and is still on-going.

Recently, I received a phone call from our Accountant to state that he had received a Corporation Tax cheque sent from the Tax people addressed to our old company, and that he was sending forward it to our home address.

I received the cheque next day to my home address, and was happily surprised at the amount that it showed.

Shortly after, my Accountant rang me up to say that he had made an administrative error on his PC. He said that the cheque belonged to him, and that we should send it back to him straight away.

The cheque is addressed to our 'old' company, and that is on its way to being shut down - and is close to the end of its life now. The bank account is still open due to my partner having some other business concerning his job at the moment, and some past payslips that has to be sorted out.
So that is why he is keeping our old bank account open at the moment to use as a holding pen so he can move his money elsewhere - yes I know that the tax people can access the 'bank' funds and we are aware of that too!

Anyway, back to the subject of our Accountant.... my partner and I decided to ignore what our Accountant asked of us with the cheque, as it was payable to us and not our Accountant at all. Something did not sound right, and we thought the worst that our Accountant was 'at it' and taking money that did not belong to him at all.

I received 3 e-mails demanding that I send my Accountant the money he was due, and no explanation as to why other than it was due to him. I think this is wrong and very dodgy indeed.

So as things stand now, my Accountant rang up my partner yesterday, and was very abusive at him on the phone today - telling him he would get him debarred as a Director and he was a thief and so forth.... and the threats he received where totally out of order and very unprofessional.

After the phone call, I received another e-mail from our Accountant stating that we post the cheque into our old account, and then transfer the funds to his accountants bank account. He was only too happy to give our his details so we can forward the money to him. He gave us a time scale to Wednesday next week to have the money in his account.

Note: By the way, we have decided to change Accountant. We have taken our business elsewhere as I speak here, due to the abuse, and threats that we have received, and we want no further contact from our 'current' Accountant at all.

I really think that my Accountant should have contacted the Tax people - am I right to say this at all? Is my Accountant laundering money? I am very worried about this?

I look forward to your answers here - just to let you know I am a little 'green' with some of the issues so be kind to me

Thankyou

Trailandserror

[cojak]

No, you are quite correct to voice your concerns.

Google "Darren Upton" to see why.

Other people will be able to give you a more definitive reply but I would get another accountant in if I were you, to audit your accounts to see what is going on.

It will cost you money but it will be money well spent whatever they find. Whether something or nothing is going on, at least you will then know.

Good Luck!

[Clare@InTouch]

Firstly I would suggest you call HMRC and ask them what the current position is on your taxes. You could also sign up to HMRC Online, where you'll be able to see a history of any CT refunds paid out to you and you'll then be able to tell if the cheque is really yours https://online.hmrc.gov.uk/login

Go and find a new accountant - look for recommendations, there are plenty here. They will be able to register as your new agents with HMRC and also look into things for you. As Cojak says, they may also be able to go back into your previous years accounts to ensure they are correct (although may charge extra, depending on what needs to be done and how long it takes).

Go careful about keeping a bank account open for a company that's being shut down too, if the company is struck off the bank account will be frozen and any amounts transferred to the Crown. You can get it back, but it's a long process and you may lose some in admin fees.

Is your current accountant regulated, perhaps by the ICAEW or ACCA? If so, you could threaten to make a report to his governing body too.

[jmo21]

FFS.... this is like an episode of Lost.

Did you ask "Why?". If you did, would you care to tell us?

Someone threatens to disbar you from being a director and you don't stop and say "explain exactly what this money is from HMRC, made out out to our Old Ltd, and why you think it should somehow be paid to you."

There is a large piece of this story missing methinks.

[Wanderer]

OK, we definitely aren't seeing the whole picture here and this may be a big misunderstanding or it may be that there is something irregular going on here.

I think the way forward is:

1. Stay calm! It's not easy because people on both sides are clearly upset about this but you have to stay calm and move this towards a proper resolution.

2. Engage a new accountant immediately. There is a list of recommended ones on this forum and there are some friendly helpful accountants who post useful information here that you could approach too.

3. Get a full audit done by the new accountant. Tell them you want a review of the past 5 years of a company's accounts and ask that they give you a quote to do this. If you can't get a fixed price then agree an hourly rate and an estimate of how long it would take. If your books are straight forward then this should be fairly easy, if they are in a mess then you are going to pay the price. Either way, your company must be audited to get to the bottom of what's happened.

4. When the new accountant is ready, inform the old accountant that the accounts are being transferred to the new accountant and tell them that the new accountant is authorised to take a handover.

5. Make it clear that you are going to pay what is rightfully owed to all parties but you just want an independent review to clarify the situation. It is likely that the old accountant will be upset and will want a pay off for work done and that is probably fair enough. Perhaps the new accountant can give you an independent assessment of what they think is a reasonable settlement with the old accountant.

6. Take careful note of what Clare@InTouch says. Don't let your company be struck while there is still money in the bank or you will lose the money!!!

[Nathan SJD Accountancy]

Great advice Wanderer!!!

Echoing what Jmo21 said, did you ask him out right, 'why he needs the money?'

[psychocandy]

FFS.... this is like an episode of Lost.

Did you ask "Why?". If you did, would you care to tell us?

Someone threatens to disbar you from being a director and you don't stop and say "explain exactly what this money is from HMRC, made out out to our Old Ltd, and why you think it should somehow be paid to you."

There is a large piece of this story missing methinks.

First thing I thought too. Accountant says you owe me money surely you say - why? for what? please justify....

[northernladuk]

If you shut the old company down then you have lost the money. You cannot keep a company bank account open that has no company associated and therefore no one authorised to use the bank account.

I would look in to this first and foremost as you will lose any money in it and cannot do anything with the cheque whatever the situation.

[Alan @ BroomeAffinity]

There's more to this than meets the eye, I reckon. On the surface it seems extremely dodgy but if he was operating an Upton-style scam, then I don't think he'd have send the cheque out in error. And would he be sending emails asking for it back? Thus creating a trail of evidence all over the place?

But I can't figure out a reason why an HMRC cheque paid to the OP could possibly be due to the accountant. Unless the OP owes him fees and the repayment was mandated to the accountant and the admin error is with HMRC and the cheque has been issued to the OP in error (and not in accordance with a mandate?) The plan being that the accountant is going to return the cheque to HMRC and ask them to re-issue to the accountant.

That doesn't quite fit with the 'phone call from the accountant saying he was sending it. Ah sod it, I dunno. It's too late on a friday to play Columbo.

[psychocandy]

If you shut the old company down then you have lost the money. You cannot keep a company bank account open that has no company associated and therefore no one authorised to use the bank account.

I would look in to this first and foremost as you will lose any money in it and cannot do anything with the cheque whatever the situation.

Yeh. good point.