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Moral & Ethical Dilemna

shaxxashaxxa Feels At HomeRegistered Posts: 82
in General accounting discussion
Hi Guys,
Have not been around for a while so please be gentle with me :001_smile:.
My client has always been a late payer and always wants advice for nothing. (One of those clients that you really do not want :cursing:)
I have a dilemna which is that this client has their 1st big tax bill after trading for 3 years and does not have any money.
The accounts and subsequent tax return been not been returned to me with any signatures so I have not submitted the tax return.
My invoice also remains unpaid.
My dilemna is that HMRC at this moment are unaware of the tax owed until I file the return, the obligatory penalty has been incurred and my client was fully aware that this would happen.
Can I file this return without a signature so that HMRC are aware of this tax due or do I wait until I get paid and have the accounts/tax return signed off?
My suspicions are that this client is avoiding these issues because they have not set aside any money for tax and have traded for the last 3 years with paying very little tax. The business is a nice little earner but my client is terrible with money and always has been.
I am more than annoyed that my bill has not been settled either and out of this I would be more than happy to inform HMRC but then the moral & ethical dilemna sets in.
If this ever gets resolved that this client can consider themselves dumped.
Has anyone had any experience of this- please let me know?
I did ring the AAT Ethical helpline yesterday and the lady who couldn't help me and didn't have a clue was going to get someone to call me back, which of course they didn't!:glare:

Shazza

Comments

  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    I wouldn't file a return without a signature, that could come back and bite you!

    Chase your money as you've done the work, whether you file or not - you need to be paid

    You will then need to look carefully at money laundering issues if you believe the client is deliberately avoiding tax. I would take AAT advice on that one (presuming they ever ring you back).
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    I wouldn't submit it for two reasons, one because your client has not paid you and why should you help him out, and two because the tax return has not been approved by your client so you can't really submit it. I have a client who has not paid me and I have not submitted his return. He has had a penalty but I have heard nothing from him or HMRC.
  • shaxxashaxxa Feels At Home Registered Posts: 82
    Thanks Guys.
    I guess I'm just peeved that I really don't think I'm going to get paid but I'm also very aware that this client is also avoiding paying tax.
    I will ring AAT again tomorrow and let you know what they advise.
  • shaxxashaxxa Feels At Home Registered Posts: 82
    Hi Guys
    Just to let you know that I have been advised by the AAT that if my client does not sign off their accounts and tax return then I should bring to their attention that because tax is owed and has not been disclosed then I can no longer act as their accountant ( the pleasure will be all mine :thumbup:)!

    I should also advise my client that after a 'reasonable' amount of time if my client has not made disclosure to HMRC then I have an obilgation to make a report to SOCA.
    These are reference to AAT's Guide to Professional Ethics section 160. 1.11 & 1.12.

    Need to get my bill paid first!:cursing:
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    Did AAT really advise you to tell the client that you will make a report to SOCA?!

    I may be wrong, but I believe 'tipping-off' carries a prison sentence!

    Well done for getting rid though, and remember to keep pursuing them for your fee. I find these people useful for chasing up payment.
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Dean

    You beat me to it, you went yesterday then?

    I agree with the tipping off comment as that is my interpretation as well

    Poodle
  • shaxxashaxxa Feels At Home Registered Posts: 82
    Actually AAT words were to tell the client that I have an obilgation to do so but NOT to tell them if I do.
    In my best interests I would be inclined to advise the client that they have a duty to make a disclosure to HMRC and leave it at that. Then I can still make a report to SOCA after a reasonable time.

    Thanks for the link Dean-very useful :001_smile:
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    shaxxa wrote: »
    Actually AAT words were to tell the client that I have an obilgation to do so but NOT to tell them if I do.
    In my best interests I would be inclined to advise the client that they have a duty to make a disclosure to HMRC and leave it at that. Then I can still make a report to SOCA after a reasonable time.

    Thanks for the link Dean-very useful :001_smile:

    This sounds right.
    Shaxxa, I agree with all the advice on here.
    Don't file (you have not been paid and, more importantly, he has not given you consent), remind them of your MLR obligations, and chase for payment.

    Good luck, we all get these sorts of clients and they are a PITA...
  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    faerie9 wrote: »
    remind them of your MLR obligations

    Without tipping off!
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    shaxxa wrote: »
    Actually AAT words were to tell the client that I have an obilgation to do so but NOT to tell them if I do.

    I think that is quite obscure advice and in my opinion quite poor.

    You would tell the client, via your letter of engagement, of your obligations to ML. There is no need to 'remind' them now - in my eyes that would amount to 'tipping off'.

    I'm glad you posted your query on here.

    Regards

    Dean
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