accounting transactions completed by old accountant

Laura8192

Hi

I have a Sole Trader client that it has taken me 6 weeks to get information out of the old accountants, they just kept stalling. They have finally sent me though their "paperwork" which is basically the workings for each VAT return quarter.

This is not ideal but I have managed to compile opening balances from this, I will need the data to complete my clients SA tax return for 12/13. For tax return for 11/12 I have the data in Excel but I am not going to input this into VT, she only traded for 2 weeks in 11/12 (started business 13th March 2012) so not worth doing anything else.

My problem is that I am not happy with some of the transactions the old accountant has put through, for example petrol receipts have been entered for the full value, not pro rataed for business use (I would just claim 45p a mile myself). I am concerned about making any amendments to this because the VAT returns have already been submitted.

Also, their wages cost is much higher than the payroll, they say this is because the staff are under the LEL so do not need to be on the payroll but they have no paperwork to support this at all (just a written figure on a sheet each week to say staff costs £350 for example) and I find this very concerning. For example their payroll cost for 6 months is £4k, and they have payroll to support only about £400 of this. I find it quite crazy that the old accountants were happy to take the clients word for it and include it in the accounts.

I was thinking about reversing the £3,600 out and telling them to put all staff on the payroll regardless of the value.

I am really confused by this, it was meant to be such an easy client but I am fast thinking that they are a nightmare client I shouldn't have taken on!

Appreciate anyones thoughts on this.

Thanks
Laura

Fireraiser

Laura8192 wrote: »

Hi

I was thinking about reversing the £3,600 out and telling them to put all staff on the payroll regardless of the value.

All staff will have to be on the payroll from next April anyway, so this seems like a good idea.

Bluewednesday

If they are putting the petrol receipts through are they claiming the fuel scale charge?

I agree that they have a cavalier attitude to staffing costs, but they take the responsibility for the returns. i would explain what information they have to keep in case of an HMRC investigation but if they insist the staffing costs are correct then I would include it. make sure you document your discussions regarding it to show you have advised them!!

Laura8192

Thank you for all your help.

They are not claiming the fuel scale charge but I am going to suggest it to them as they will never keep mileage records so this appears to be the best option.

I am going to put in writing what I am advising regarding payroll and get them to sign it I think, so I have proof I am advising them correctly. I'm going to suggest getting all staff on the books ASAP, regardless of the LEL seeing as from April they will have to be on there anyway.