For a while now I have been providing a sub contract roll to a local accountant. He sends me paperwork to work on; I bill him at £15 per hour (the maximum he says he can afford to pay.) For a little while now I have felt that he is using me. The inital set up was that I would prepare draft accounts for clients, mostly self employed, and then once the figures were verified, put in their SA figures to HMRC. Everything is done under his name, including letters I write to clients with his headed paper.
It started out like this, but more recently he has been asking me to submit figures from draft; it appears without them being checked over by him. He's passed on requests from clients for Contracts of Employment, or Contracts for Self Employed, input of Corporation Tax, and Ltd Company set ups. Some of this I have felt has been beyond my experiences and knowledge. When I ask him advice on particular topics, the reply is often that he has no experience of that sinario. His advice is almost alway to write to HMRC. The final straw was when he asked me to write to a client on his behalf, who'd enquired about registering as a Ltd Comp, and say his fee for Comp. formation was £550. A week later, he asked me to set them up!!(Obviously paying me at the £15 per hour rate to do so!)
His business has no website, and his headed paper shows no accountancy qualifications. I am beginning to wonder if he has any accountancy qualifications at all, and just uses sub-contractors like myself to do the work for him.
Do you think I should do a runner from this guy, before something I do unsupervised has consequences for the client?
Your views would be much appreciated!!!
-- Edited by LizB on Wednesday 13th of April 2011 04:30:21 PM
If he is a member of an association it would have to be on his letterhead. Sounds like an unqualified case to me.
You could do a member name search on ICAEW or ACCA website.
As for fees then yes, I think you should be charging a significant amount more than your. If he can't afford it - tough. By the way £550 for a company formation is huge!!!
__________________
Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
Sounds as though you are probably being asked to go beyond what your PII will cover you for.
Why not ask the accountant point blank which body they are with on the grounds that you are thinking of working towards being an accountant yourself and with their being able to sign off your work under their direct supervision you would be able to get the experience that you need.
In that way you have very much put the ball in their court.
If they say they are with body X then you can conform directly with that body whether the accountant is a practicing member as they claim to be.
If they say they are not registered with an accountancy body or um and ah around the question avoiding a direct answer then you have your answer.
Hope that this suggestion helps,
All the best,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks for your replies guys. I like your idea Shamus, I will do that and see what he says. I did keep a letter from him at the very start saying he would be responsible for all data submitted or provided by me, but there have been a few times when I feel he has had no idea how to proceed, and has just passed it to one of his 'subbies'.
I had a call the other day from one of his contractors who he'd passed some work to that I had only part done. (I'd prepared incomplete accounts and handed it back to him, as I was getting no where with the client in trying to clarify things, and had just had enough of chasing and getting no further forward,especailly when the client said he'd just asked for a cheq for £700 to cover work in progress, and I'd billed him no more than £200 tops for my hours!!! I had a big issue over payroll, and had listed out all the problems to him.) He'd just forwarded it all onto this poor girl who'd just started with him. She said had been self employed for less than a year, and had just passed her level 2 ICB paper. Poor girl had no idea where to start. When she'd spoken to him, he'd given her my number!!!
What an incredibly odd set up. Sounds like he's charging huge fees for not actually doing anything. Personally I think this will all come crashing down around his ears at some point, and I wouldn't want to be in/associated with the fallout of that. I'd certainly be wanting more than £15 an hour for some of the work you describe. However unqualified doesn't always equal without relevent experience, but in this case....
__________________
Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
What an incredibly odd set up. Sounds like he's charging huge fees for not actually doing anything. Personally I think this will all come crashing down around his ears at some point, and I wouldn't want to be in/associated with the fallout of that. I'd certainly be wanting more than £15 an hour for some of the work you describe. However unqualified doesn't always equal without relevent experience, but in this case....
It would be a nice thought, but I think he may probably get away with it. Seems like the worst extremes of the profession.
Re how much you charge him, I don't think that's too bad for a subcontractor. Say you work 7½ hours p/d, 5 days p/w, for 48 weeks, that's £27k. Whatever he charges his clients, well that's his business.
Being used or not isn't the issue - after all, that's what capitalism is all about! - it's as you mentioned, the repercussions. Time to revisit your terms.
As Nick says he'll probably get away with it because he'll subcontract to people with a greater knowledge than he seems to have. Personally, I'd want to make it clear where the cut-off point is. If you're submitting figures from draft and you've agreed he's supposed to confirm the figures then I'd want it to be clear the responsibility is his.
I know of at least one other Accountant where I live who operates in a similar way.
__________________
Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
You have to cover yourself. Check any agreements/contract you have with the accountant and that your liability is restricted (e.g. all your work is draft to be checked by the accountant) although that may not be enough. The price for company formation is a conman price which depends on naive clients. Hope that's not too strong! You can bet he'll be charging clients 3x what he pays you but that might be close to the norm ... One part for you the sub contractor, one for the accountant's costs and one for his profit.
