Professional Clearance Ethics

groundy Registered Posts: 495 Dedicated contributor 🦉
I was looking for some guidance with regards to the ethics of dealing with professional clearance. We have recently been requested to act for 3/4 clients that all used the same accountant previously. We have wrote to the accountant who has replied stating there are no professional reasons why we should not act.

However, he would not release any information requested as he states there are outstanding fees. After speaking to my new clients it has become apparent that he has charged each of them £100 plus VAT for replying to our professional clearance letter. Each of these clients are subcontractors and we are only charging them £140 for the completion of the return.

The previous accountant is not monitored or regulated by any professional body and therefore there is no provision to lodge a complaint against these charges. Therefore, my question is - Is it unethical to write to HM Revenue & Customs and request a copy of the previous years tax return rather than asking our clients to pay the fee so that he will forward a copy?

I would greatly appreciate any comments on this.


  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Charging to release info is bad practice IMO. However as he isn't a member of one of the bodies, then he can charge if he wishes. I'm not surprised the clients aren't paying though!

    If you have a 64-8 in place then there's nothing wrong with getting HMRC to supply a tax return copy. The problem is, it won't contain all the brought forward balances you need. Chances are it won't even show a balance sheet, only a P&L account and capital allowances claimed.

    Unfortunately if this chap won't release info without some money, its an awkward situation and I don't know of any way round it.

    Bad practice, though, I'm not impressed!
    BIG WAL Registered Posts: 133 Dedicated contributor 🦉
    I would certainly agree this may be the best way forward. Hopefully HMRC will co-operate, particularly if you explain to them that their last adviser refuses to provide any information.

    Regarding capital allowances, if you do get the figures for the last tax year, would it perhaps be possible to work back wards? As they would probably be 25% so you could work out the B/Fwd value and go from there. Use the white spaces on the next SA to explain capital allowance are a best estimate. This was accepted when something similar happened with me.
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    Thanks for the replys. The balance sheet isn't an issue as they are all subcontractors working on and I&E basis. Therefore it is the Capital Allowances that are the main issue.

    I have already had a prompt response from HMRC on one client but I was just concerned if there was a case for the previous accountant to make a complaint against me to AAT as he is not going to get paid.

    I agree it is a disgusting practice to charge when leaving. It is very rare that we come across it and we have been in business 10 years. However, just had our best one yet were a firm of Chartered Accountants have charged a client leaving them to join us £900 for suppossed meetings and filing of financial statements even though client had already paid an invoice for the completion of the accounts which you would assume included the filing charge.

    Very frustrating.
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