Reply to: Predicament - what should I do?

[r0bly0ns]

He should be happy that you are questioning his professional judgement, I question my accountants all the time when I want something explained to me. At the end of the day you are the person who is going to get in trouble if your accounts are wrong, not your accountant.

If you are not sure of something you should always challenge it and satisfy yourself that it is being done correctly, remember it is your ass on the line not his. I'm not suggesting that your accountant would purposefully do something wrong, but if he does it is not as big a problem for him as it is for you.

I would also keep an eye on everything else as well and ask him to explain anything you do not understand or do not feel comfortable with, if he has got this wrong it is possible he has slipped up somewhere else as well.


I know you don't want to make a scene and cause any ill feeling especially as you accountant appears to be good friends with other member of your family, but at the end of the day you are looking after your business. Don't let personal relationships get in the way of business, and never accept sub standard service. It is things like this that could potentially end your business.

This is exactly what I have done from day one and still do.

On the very rare occasion that my accountant has made a mistake (once I think), he has been very apologetic and rectified it immeditaely.
On the 100's of times it is just me not understanding what he is doing, he has taken the time to explain things to me.

Acountants are people too .

[Ardesco]

I didn't want to question his professional judgement really as it's a bit embarrassing to have to point out how he should do his job! All the same he's spot on with everything else and is doing my year end for me etc for a very good price (to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

He should be happy that you are questioning his professional judgement, I question my accountants all the time when I want something explained to me. At the end of the day you are the person who is going to get in trouble if your accounts are wrong, not your accountant.

If you are not sure of something you should always challenge it and satisfy yourself that it is being done correctly, remember it is your ass on the line not his. I'm not suggesting that your accountant would purposefully do something wrong, but if he does it is not as big a problem for him as it is for you.

I would also keep an eye on everything else as well and ask him to explain anything you do not understand or do not feel comfortable with, if he has got this wrong it is possible he has slipped up somewhere else as well.


I know you don't want to make a scene and cause any ill feeling especially as you accountant appears to be good friends with other member of your family, but at the end of the day you are looking after your business. Don't let personal relationships get in the way of business, and never accept sub standard service. It is things like this that could potentially end your business.

[Archangel]

(to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

They won't be happy to find out he's incompetant!

[Sockpuppet]

Surely the 9p per mile is VAT and is deducted from your VAT return. You don't pay that to yourself directly.

No. Wrong.

No VAT on the 40p as your employees are not vat registered. You can claim the VAT back on the fuel element but its closer to 2p a mile.

[chris79]

Wow, cheers guys for the 2 above posts.. both make sense. What I'll do is if my accountant agrees it's a f**k up then I'll do the directors loan method and repay it. If he insists its 40p+9p, then I'll take his word for it and just pay the tax on the 9p through my own self assessment... result either way!

I didn't want to question his professional judgement really as it's a bit embarrassing to have to point out how he should do his job! All the same he's spot on with everything else and is doing my year end for me etc for a very good price (to be fair I've put a bit of business from other people his way) etc.. so looks like it's all well that ends well!

Thanks again!

[Archangel]

I've spent 10 months claiming this 40p + 9p per mile, approx 200 miles per month. How can I go back and correct this as I've been paying my mileage expenses monthly out my company account. I have the log in excel so I can just delete the 9p column and it will give me the correct total, but how would I fix this in my books? I don't want to ask my accountant this as I've already discussed this with him and he is adamant that it is fine to claim this 9p extra. In all honesty it's a bit worrying that this mistake can actually take place by someone in the profession, but everything else so far he's been spot on with.

I presume you haven't had a yearend yet? If not then go back and change all the 9p payments to "directors loan account credit", then pay the company back the £180.00 and enter it in the books as "directors loan account debit". Sorted.

HTH

[ASB]

Well I called my accountant and just put it to him, said I had discussed it with some other contractors and that they had been told they were only allowed to claim 40p/mile.

I also contacted HMRC who confirmed this.

My accountant is going to look into this and get back to me tomorrow.

All "expenses" count as income. Some are reclaimable. Check the notes on your tax return at the end of year. I think you may well find there are now two boxes.

One in which you put the excess of mileage received over the allowable 40/25 (which you should fill in).

One in which you put the deficit (e.g. I only get 11p a mile for nominal fuel costs because I have a company car [actually I trade it for cash but thats a different thing]). In this case I get relief on the difference.

The net result is everybody who fills in a tax return gets relief at 40p/25p irrespective of what they are paid.

You have done nothing wrong provided you fill in the reutrn correctly.

[chris79]

Well I called my accountant and just put it to him, said I had discussed it with some other contractors and that they had been told they were only allowed to claim 40p/mile.

I also contacted HMRC who confirmed this.

My accountant is going to look into this and get back to me tomorrow.

[maverick]

Surely the 9p per mile is VAT and is deducted from your VAT return. You don't pay that to yourself directly.

[VectraMan]

As I understand it, there's nothing stopping you paying £100 per mile in mileage, just that only 40p of it is allowable as tax free. So in other words, the extra 9p's worth will become part of your income and you'll have some extra tax to pay at self-assesment time. It doesn't affect the company's books, as the company can pay you whatever it likes.

But I am not an accountant, and you should ask a real one. Either that or get your accountant to show you his evidence, post it here for us to see, and let all the other accountants know that they're doing it wrong.

[shelby68]

Incidently what are the consequences of claiming incorrect amounts, do HMRC simply make you pay it back, or are there fines etc involved? I'm an honest person and will be sorting this out, but surely it must have happened to people in the past, how do HMRC deal with it? Does it even get noticed?

Just make an adjustment in your year end figures before its been submitted it should be fine, ultimatly the tax man's only bothered that you pay the correct ammount.

Never hear of the 9p a mile before on top of the 40p a mile milage allowance, maybe I need to change my accountant

[Ardesco]

If you haven't finalised your accounts for the past 9 months nothing to worry about yet.

[daviejones]

I would try and avoid Bubba if I were you...

[chris79]

Incidently what are the consequences of claiming incorrect amounts, do HMRC simply make you pay it back, or are there fines etc involved? I'm an honest person and will be sorting this out, but surely it must have happened to people in the past, how do HMRC deal with it? Does it even get noticed?

[Ardesco]

Phone another accountant and query them on this and then talk to your current accountant and say that another accountant you know/work with/etc is adamant that this cannot be claimed and could he provide you with references to the HMRC site and explain how it all works to set your mind at rest.

At the end of the day you are paying him to do your year and and provide you with advice, he should not be upset that you want to verify his advice is correct and that you are getting what you pay for. Also bear in mind that if the HMRC have any problems with this claim they will go after you and not your accountant.


As for bookeeping you can either deleted the column and pay back that extra 9p/mile or class the extra money as wages/divi/directors loan