Have any IAB members had problems providing accountants references for clients to banks. - The Book-keepers Forum (UK)

David Ballantyne · Senior Member

Have any IAB members had problems providing accountants references for clients to banks.

Shamus · Forum Moderator & Expert

Surely the question is not whether you can but whether you should.

Will your PII cover you for such?

With accountancy qualifications it does but IAB is not an accountancy qualification so if the mortgage applicant defaults and there is something amiss with the information upon which the original loan was granted what protection would you have against personal liability? (assuming that you are not trading as a limited company).

I think that my first call would be to my PII provider rather than the IAB on this matter,

kind regards and welcome tot he forum,

Shaun.

newleaf · Veteran Member

Hi David and welcome to the forum.

As an ex-mortgage advisor i would assume that a bank or mortgage provider would only consider accounts signed off by a qualified accountant rather than a bookkeeper, not to be-little bookkeepers as i am currently going along the icb route myself. I say assumed as I never came accross somenone who provided accounts produced by a bookkeeper during my time as a mortgage advisor. Whilst evey lender has different criteria most are along the same lines that for self-employed applicatants 3 years accounts most be produced with accountants reference. However even that is not set in stone as not everyone who is self-employed uses the services of an accountant and some might do their own self-assessment or accounts and some might well use the services of a bookkeeper, qualified or not. In these instances i am guessing that the lender would consider proof of tax return to HMRC as evidence of income / earnings.

It would be nice to know a deifinative answer as it had crossed my own mind recently wth my veiw to offering bookkeeping and accountancy services.

NickCraggs · Guru

Hi,

I would be interested to hear ICB/IAB members have to say on this, as sometimes, I have had problems as a member of the AAT.

kind regards

Nick

Shamus · Forum Moderator & Expert

Hi Richard,

my background is in banking. Back / head office rather than branch.

It is stunning to see how policies set are actually applied on the ground floor and this is one such example.

Banks make money from mortgage books. There is (was!) incentive to sell mortgages. Policy was that accounts must be verified by a CCAB accountant but that was often taken in branch as certified by an accountant and front line staff often seemed oblivious to the differences between the accountancy bodies so on many occasions there were cases of mortgages being approved that should not have been. (the decisions were taken by computer but the input was the weak link).

Heads have rolled in branches due to some decisions made which will make branch staff keener now to ensure that i's are dotted and t's crossed than was the case up to around 2010.

People who do not have their accounts prepared by an accountant may find it more difficult to obtain both personal and business finance without the offer of substantial personal guarantee's

My understanding is that some banks have more flexibility on what is considered an accountant but for big four they are really looking for CCAB members only.

kind regards,

Shaun.

newleaf · Veteran Member

Hi Shaun

My experience was the self-employed and people with bad credit and so did not deal with the main stream banks as they tended to not want to know and so we tried to place them with more specialist lenders. That being said i got out of the industry back in 2008 due to the economic climate and the fact it was virtually impossible to place a mortgage at the time if you were self-employed or had bad credit so i am a little out of touch. From my understanding things have been tightened up considerably and along with an even larger deposit required and whilst i am of the opinion that lenders would not accept a reference from an un-qualified accountant I suspect that some may well accept proof of income from tax-returns or confirmation from HMRC on income declared but i still doubt that they would accept a reference from a bookkeeper or un-qualified accountant.

Richard

Shamus · Forum Moderator & Expert

I agree Richard.

The crossover to my mind (as touched upon by Nick) is AAT.

It's not CCAB but MAATs are considered accounants so I suspect that some lenders would accept accounts prepared on that basis where others may not.

I'm sure that a similar scenario would exist for other bodies such as IFA and AIA accountants.

Like yourself though I'm pretty sure that the pure bookkeeping qualifications would not be deemed acceptable.

And that leads to another interesting point, what about signing passport application verifications? CCAB qualified Accountants can sign such but can bookkeepers? can AAT, IFA, AIA, etc?

kind regards,

Shaun.

Spamkebab · Expert

Is the passport application more strict than the drivers licence application? I have just BOUGHT a new plastic licence after trading in my old paper one
to use as photo ID. I can't believe they charge after taking all my money years ago.

Anyway my mate signed my pic and put his profession as Engineer.

newleaf · Veteran Member

As regards to passport applications then these may be a bit more lax, i say this as believe or not before i was mortgage adviser i was a sub-postmaster and was allowed to verify passport applications along with others. I think the thing is that you need to be in a professional occupation or in a occupation with high public standing, i.e. Doctor, Solicitor, Accountant, Vicar, Sub-Postmaster for example, again i'm not sure whether a professional bookkeeper would fall into this category, again i suspect not, but then again maybe, only way to find out for sure is to give Passport Office a ring.

David Ballantyne · Senior Member

Hi

Something that just crossed my mind.

If accounts and tax returns are prepared by an unqualified accountant, I guess it would be possible to ask a qualified accountant to audit the accounts and prepare a letter. Obviously a fee would be payable.

Any ideas on what such a fee would be, say to audit three years accounts and prepare a letter for a sole trader electrician?

David.

NickCraggs · Guru

we had this query this week. A student wanted us to sign their passport as we had known them for several years being an ACCA student, but we had to decline as it has to be a face to face relationship. But we did wonder, in the days of skype etc, you can know someone in a professional capapity very well without having to have been in the room with them, where do they draw the line?

Anyway the point of this is post that we discovered that the rules for passports are quite relaxed, or so we thought anyway. You have to be a professional or have a high public standing (journalists come under this catagory), or more importantly for bookkeepers "a member of a professional body".

newleaf · Veteran Member

Nick could you have not used some thing like Verify or get the student to send original passport via special delivery for you to check, obviously at the cost of the customer.

newleaf · Veteran Member

David Ballantyne wrote:
Hi
Something that just crossed my mind.
If accounts and tax returns are prepared by an unqualified accountant, I guess it would be possible to ask a qualified accountant to audit the accounts and prepare a letter. Obviously a fee would be payable.
Any ideas on what such a fee would be, say to audit three years accounts and prepare a letter for a sole trader electrician?
David.

David I think that is the only logical way around it and it may well be worth cultivating a relationship with a local accountant so that you can offer this type of service.

Shamus · Forum Moderator & Expert

David Ballantyne wrote:
Any ideas on what such a fee would be, say to audit three years accounts and prepare a letter for a sole trader electrician?

whilst there may be some debate over the term accountant there is non over the term auditor which is protected in law.

You cannot under any circumstances perform or give the indication that you are performing statutory audits of accounts or give the impression that such have been audited.

Only members of Recognised Qualifying Bodies (RQBs) who have jumped through the additional burning hoops are allowed to be auditors (audit requirements and practice certificates are above and beyond normal practice licences).

The RQB's are ACCA, ICAEW, ICAI and ICAS (so basically ACCA and ACA).

Two other bodies members AIA and CIPFA can perform audits under the supervision the AAPB which is a subsidiary of the ACCA.

Similar rules exist for insolvency work which is also protected in law.

kind regards,

Shaun.

David Ballantyne · Senior Member

Shamus wrote:
You cannot under any circumstances perform or give the indication that you are performing statutory audits of accounts or give the impression that such have been audited.

Um, I wasn't intending to.

NickCraggs · Guru

newleaf wrote:
Nick could you have not used some thing like Verify or get the student to send original passport via special delivery for you to check, obviously at the cost of the customer.

Unfortunatley not, as to sign a passport photo you need to have known a person visually for 2 years, speaking on the phone to them, even on a daily basis is not good enough.

I am not sure what verify is?

Shamus · Forum Moderator & Expert

David Ballantyne wrote:
Shamus wrote:
You cannot under any circumstances perform or give the indication that you are performing statutory audits of accounts or give the impression that such have been audited.

Um, I wasn't intending to.

Hi David,

You said "audit three years accounts" which is what I was responding to.

kjmcculloch83 · Expert

David Ballantyne wrote:
Hi
Something that just crossed my mind.
If accounts and tax returns are prepared by an unqualified accountant, I guess it would be possible to ask a qualified accountant to audit the accounts and prepare a letter. Obviously a fee would be payable.
Any ideas on what such a fee would be, say to audit three years accounts and prepare a letter for a sole trader electrician?
David.

I think you maybe missed this bit Shaun, just my highlighting. I assumed when David said qualified he meant qualified to carry out audits.

Kris

David Ballantyne · Senior Member

Hi,

Perhaps I should have written "qualified auditor".

Shamus · Forum Moderator & Expert

Sorry, its me reading something completely different to what was written on the screen... When I make boobs like that thinks time to pack up and have a rest for the evening.

many apologies David and many thanks for highlighting my mistake Kris.

Time for a trip to Specsavers methinks!

Shaun,

kjmcculloch83 · Expert

I don't like highlighting anyone's mistakes. I always think it'll come back to bite me in the bum.

Shamus · Forum Moderator & Expert

Hi Kris,

not from me. The thanks for pointing it out was genuine rather than sarcastic.

If I make a mistake I'm happy for anyone to point it out (spelling and grammar excepted due to the dyslexia) and as in this instance I'm first one to hold my hands up and appologise.

No excuses from me. I wasn't concentrating on the post. I scan read it and made a mistake.

Right, water under the bridge. moving on...

kindest regards,

Shaun.

Shamus · Forum Moderator & Expert

Hey, just noticed Kris. You've moved up to expert (If you add the old userid to this one you were actually there long ago). Congratulations matey.

Whats that now, You, me, Bill... Is there anyone else?

Steve, Neil, Amanda, Tim and Stuart are all getting close now.

You can see who the site addicts are can't you!

ClawzCTR · Guru

I am IAB registered, and I have come across this several times last year. I work one day a week doing bookkeeping at a Financial advisor, naturally they have a lot of mortgage applications coming through the office, only occasionally do they tie in with a self employed person.

This is personally speaking, but all the mortgage applications that I have helped with has involved calling HMRC (using the agent line) and asking them for the past 3 years SA302's. For those of you who don't know what one is: They are an official form from HMRC that show the applicants income history on their self employment. The reason why they ask for these is financial reports can be too easily forged. These SA302's normally take between 2-4 weeks to be sent to you, BUT I have had them faxed to to office in under ten minutes (if you make a story up saying the "Mortgage provider need them now and will close the offer by the end of the week if we don't get them") you get them faster than the traditional 'snail mail' method!

Most Mortgage Providers, MP's, are happy with, sometimes insist, on SA302's; and as an 'agent' for your client/HMRC you can request them at no hassle or charge... hell the client can even do it if they want, only thing is they will wait for 20 minutes on hold before they get to speak to someone, and then they wont be able to pressure HMRC to get them to you ASAP. Your choice really.

Hope this helps answer your original question David

As for the preparing accounts area, well that's up to you, but like i say, MP's, normally require the SA302, so if you can do a tax return......

David Ballantyne · Senior Member

Hi Gary,

That was a very helpful answer. Thank you very much. Seems this would remove the need for an accountant's letter.

Thanks,

David.

Amanda · Expert

HI,

I had to provide an SA302 for my mortgage application last year, as I do my own accounts and they are not signed off by an accountant. It was straight forward to get them form HMRC, really all they are doing is verifying that you have inputted the information correctly on the internet. Who are they to know whether they are correct or not (mine are okay but if Joe bloggs did their own they might not be).
It took about a week for it to come in the post.

HTH

David Ballantyne · Senior Member

Hi,

Having searched Google for SA302 and looked through the few accountants websites in the results, it seems that it is now standard practice for mortgage lenders to request the SA302 instead of an accountants reference.

David.

-- Edited by David Ballantyne on Thursday 28th of March 2013 09:51:42 PM

newleaf · Veteran Member

I was pretty sure that there would be an answer along these line but just not come across it in my short career as a mortgage adviser.

Thanks Gary for providing a definitive answer and also for Amanda for confirming it is relatively straight forward.

ClawzCTR · Guru

David Ballantyne wrote:
Hi,

Having searched Google for SA302 and looked through the few accountants websites in the results, it seems that it is now standard practice for mortgage lenders to request the SA302 instead of an accountants reference.

David.

-- Edited by David Ballantyne on Thursday 28th of March 2013 09:51:42 PM

Some website I visited David talked about the way of asking for SA302s and they did a small survey, 2/3's of accountants didn't even know what they were or how to get them!

I'm not able to help much guys, but I'm glad you found my post of some use. :)

-- Edited by ClawzCTR on Friday 29th of March 2013 07:51:10 PM