I have recently taken on a new client, I'm a little unclear on a few things and wondered if I would be ok to contact his old accountant to ask him a few questions. Is this the correct thing to do or would anyone advise me not to?
The only records I have from any of his previous self assessments is a completed 2010/11 form. This is my first client to have come from another accountant so I have no idea what records he should have passed on to me if any, please could some one advise me of the normal practise.
On the 2010/11 completed form it shows he has an ''other capital allowance'' in box 24 of the short self employment form. Looking through all his paperwork I can't make head nor tail as to what it might be for, I have asked him and he hasn't got a clue either.
Also my client has worked as a contractor for a company and paid 20% tax on his invoices, do I class this as CIS? I thought you had to be registered to be a contractor paying CIS as you do with an employer deducting CIS? On the payment and deduction statements he has received, it quotes a contrators empoyers ref (ten digits long), is this a key sign that he pays CIS? There is no figure on the last completed tax return to say he had paid CIS so how would the payment of this prepaid tax been shown?
Any help or advice is greatfully received. Many thanks in advance.
I would normally send a previous accountant or bookkeeper a professional clearance letter as a courtesy and to request any information which they might have.
Are you a member of a professional body? If so they should be able to provide you with a template. Failing that drop me an email at the address below and I will send you the one I use.
Yes you definitely need to write to the previous accountant for 'professional clearance'. In completing the previous accounts, there may have been accruals and prepayments, plus you also need to make sure that capital allowances are dealt with properly (the SATR does not show the pool balance).
On the CIS issue, if your client worked as a subcontractor, he will have had CIS deducted by the contractor, and should receive certificates to confirm. If he's not registered for CIS, the deductions will be 30%.
My understanding is that different professional bodies demand different standards of their members in this matter. Of course there are those with no professional body, and those who are just not professional and give you nothing.
Myself, I'll happily provide the new bookkeeper/accountant with anything they need (as long as it doesn't cost me a fortune to prepare). I seem to have experienced a great many of the group who either provide nothing, or don't even respond.
I prefer to live by the "do to others as you'd like them to do to you" mantra.
Kris
-- Edited by kjmcculloch83 on Wednesday 27th of June 2012 08:52:30 PM
but of course the previous accountant has no obligation to give up or even give copies of their working papers.
My understanding is that the accountant has only to give a copy of the latest set of accounts and the the trial balance from which they were created.
I wouldn't be so mean to a new firm but it's just stating what my understanding of the minimum obligation is.
kind regards,
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.
Same here Kris, if any client ever decided to leave me I'm more than happy to pass on their files and even a VT backup to save the next incumbant a bit of typing.... Of course, they don't get their first born child back until they've paid any outstanding fee's! lol.
The approach above comes from the ACCA guidance but my belief is that it's enshrined in the ethical standards from IFAC. I'll have to look that up later to see where exactly my quote comes from... I know, it's terrible, I'm remembering a rule but not whose rule it is!
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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.
