I've taken on a client from an accountant who is a nightmare to get info from and I've accepted that I have got all I am going to get and the client doesn't really understand enough to be able to help.
My problem is how he has previously dealt with Vehicle/ Motoring Costs.
The lady has a car on a personal contract purchase plan where she doesn't own the car unless she pays the balloon payment at the end. It would have been most beneficial to put through these payments as an expense and not claim any capital allowance. However, this doesn't appear to have been the case as the motor expenses total for the previous year does not add up to this figure and there is a capital allowance pool showing at 18% with no heading and no original cost etc. but I can only assume that this is the vehicle as there is no other real major assets.
This leads me to the fact that there is no way of knowing if there has been any adjustment for private use which there should have been.
The lady has now changed the vehicle so for next years accounts I will be able to use the more beneficial method and but in the meantime would it be acceptable for me to make a fair assumption on how these figures have been reached?
How would this work in the case of investigation?
I look forward to hearing your views and getting this tied up
Many thanks
Valerie
__________________
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.
Have you got a copy of the contract? sounds like HP and the other accountant has put the interest through the P&L and capitalised the car (but that is just a guess)
Is there no way you can get any more info from the previous accountant regarding the WDV and personal use, I have never known anyone to use a car for business and have no personal use whatsoever, what about your client surely they know how much is for personal use?
I certainly would not want to be making assumptions on how the figures were reached, also you say they have a new car so will the old one not need to be disposed of?
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Yes its definitely a PCP plan with the balloon payment to purchase as she has just changed the car again on the same plan and I have the contract for this on which I have double checked , but that will go into the next years accounts which is a shame.
I have spoken to the client again and she was told not to save any fuel slips or vehicle expense records which suggests to me that a mileage allowance was being used but that would not explain why there was capital allowances claimed.
Aaaargh, this will teach me to take on a new client so close to the self assessment deadline.
__________________
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.
Anything in the fixed assets on the balance sheet? How close is the motoring cost without allowing for the vehicle on the PL? If it's considerably higher maybe he has but taken a chunk off for private use. Has he included the interest in the PL, does that match with the interest charged (client should be able to get a copy of the agreement from the leasing co. If lower on the PL you may be able to work out the private use percentage that way.
As you say, you're close to the deadline which doesn't help you at all, although the lady shouldn't have left it til January if she was switching accountants.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Yes its definitely a PCP plan with the balloon payment to purchase as she has just changed the car again on the same plan and I have the contract for this on which I have double checked , but that will go into the next years accounts which is a shame.
I have spoken to the client again and she was told not to save any fuel slips or vehicle expense records which suggests to me that a mileage allowance was being used but that would not explain why there was capital allowances claimed.
Aaaargh, this will teach me to take on a new client so close to the self assessment deadline.
Hi Valerie
Sorry didn't mean it to sound like i was questioning the PCP was just trying to say how it was accounted for the same as HP agreement
If mileage was being claimed is there no mileage logs for proof of journeys? Even if my clients claim mileage I still tell them to keep all their receipts as extra proof not just for the value but also helps to show where they were.
As you say if mileage was being used this still does not explain the CA being claimed, I think you need to contact the previous accountant to get all the information (Does the client not have a copy of the Capital Allowances claimed by the accountant)
Good luck
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Just another thought of trying to work out the adjustment for personal use
If you know what the WDV value is now and you know it is in the 18% pool and you have access to the last tax return you should be able to work out the personal use doing this calculation
100/82 x the current WDV = Last years WDV
Last years WDV - This years WDV = Last years WDA
You should be able to get last years claim for CA off of your clients last tax return in which case
Last years CA claim / Last years WDA x 100 should give you the % of Business use
Hope this works
Edit for: This is assuming there are no other CA being claimed
-- Edited by Artois on Thursday 25th of January 2018 08:36:22 PM
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Hi Doug
I didnât take it as you questioning at all. I really appreciate the feedback. It is such a fantastic forum where people are helping each other.
No balance sheet Iâm afraid despite there being depreciation on the P and L! Simply a P and L and the most basic capital allowance sheet Iâve ever seen.
You have just given me an idea though as I could get copies of all the previous Self Assess off the HMRC site. That might do the trick.
Yay, thankyou. Tomorrowâs job now I think as my brain is frazzled.
__________________
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.
Hi Valerie
Dont know if you have seen John's response. My Q was the same as his about other assets, especially on the back of not keeping other receipts (stupid idea!)
Just because you have taken on a client so close to the deadline does not mean you have to complete the task within the timescale - if you havent got the information then you have a duty of care not to complete incorrectly so you have good reason not to achieve it. Of course you would need to warn your client. It is after all their responsibility to have all the records for their own businesses!
Couple of options - obviously previous tax returns from HMRC, but then how far do you go back. But also the client should have the drafts for approval which will show thre required information, unless of course they have destroyed such like they have the receipts. Other option - which body is the former client with? Approach them again with a threat to report them for their unprofessional behaviour if they do not give you all the records. If they dont - then report them. But care, you may find he/she has a lien over such if they are owed money. You can send with draft figures to give you breathing space.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Firstly apologies John. I read your post and took the comments on board but for some reason thought it was also from Doug.
I totally agree with you Joanne with what you are saying about taking on the client close to the deadline. This appeared a very straightforward case of lady moving near me and needing to bring the work local. I did not anticipate that it would be so difficult to obtain the paperwork and the client is herself is really hard work.
I have decided to submit estimated figures for now and then I can take the time to get things properly sorted.
I'll let you all know how I get on
Thanks
Valerie
__________________
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.
