Just received an email from a client whose accounts and tax return I completed before the jubilee break.
They are due a refund of around £ 3k but they have now said that they cannot afford to pay me until they have received the refund. This is not what we agreed but I can't win as I will not get paid unless HMRC reimburse them first.
Does this sound reasonable as I am not happy as I rushed to finish the job before last weekend in the hope i'd be paid this week. The client agreed to pay on completion beforehand, but now they are moving the goalposts.
No, it's the equivalent of contingent fee's (fee's derived from a given outcome, i.e. no tax saving, no fee).
It's not allowable for us to offer contingent fee's (see the IFAC code for professional accountants in practice) and it's not acceptable for clients to expect for us to work on that basis.
If the client is in genuine financial distress then they need to work out some other payment plan not dependant upon the HMRC refund and then escalate the payment if the refund is receieved.
Imagine the scenario if they do not for some reason receive the refund. Will they then turn around and suggest that they've lost out so you will as well?
The client have reneged on their arrangement. How you handle their inability to pay is down to you but I'm behind you in that their suggestion is just plain wrong.
Shaun.
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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.
Evenin' Ben. The joys of self employment. You don't say if the Return has already been submitted, but if not then get the refund assigned over to you. This is very common amongst sub-contractors but obviously, he has mislead you beforehand. Tim
