Disengage Client

Carole Registered Posts: 57 Regular contributor ⭐
A sole trader client of mine, for whom I was submitting Self Assessments and VAT returns has just switched to Ltd Company. A Chartered Accountant will be doing the annual returns etc for the Ltd company and has also taken over the self assessment. The change over was from sole trader to Ltd company was 1st March.
The timing means the directors will not be able to claim furlough payments and they are blaming me for the timing. The accountant made a mistake on their company set up and that caused a delay. I don't think I have anything to worry about but they are quoting losses to me as if they want me to compensate them. I recommended the accountant.

The intention was that my service to them would switch to bookkeeping, payroll and VAT only. I have not yet issued a LOE to the Ltd company for this. I did run the March payroll for the Ltd Co just because of deadlines but have not charged any fee.

I do not want to continue with them as a client.

Do I need to issue a disengagement letter if LOE not yet issued for Ltd Co?
Should I issue a disengagement letter for Self Assessment if already taken over by the accountant?
Also for VAT for the Sole Trader which is no longer trading?
Should I continue to help with monthly payroll free of charge until they find a replacement.

Thank you for your help.


  • Duchess1
    Duchess1 Registered Posts: 85

    There are quite a lot of issues here, this is what I think..;

    You need disengagement letter for the sole trader.

    if you are providing any services the new Limited Company, you need a new LOE detailing the services you will provide and outlining the costs. Even if you do work for the Limited Company free of charge, you would still need your professional indemnity insurance etc. and are still expected to carry out that work to the professional standards and they can still hold you liable if they claim there are any errors. I don't think there is any advantage for you in not charging for your services, other than goodwill.

    You need to obtain permission from the sole trader to share his details that you have regarding his accountancy affairs with the new accountant.

    I think the time scales that apply for furlough have changed since your original message..

    Good luck.

  • Buhir_the_Bookkeeper
    Buhir_the_Bookkeeper Registered Posts: 36 Regular contributor ⭐
    Hi my name is bubur from total books. I am a local accountant in Cardiff. for sake of clarity I would follow the letter of disengagements template that is provided by the AaT in their practice template section.

    I would list out all of the services I provide and exactly what has been completed and what is still due to be completed. I would also list out the fees that have been paid in any that are outstanding. Also I would outline the deadlines that have passed on what the next deadlines due would be.

    If a client left me like this I would end all their services and kindly hand them over to the other accountant I think you are being far too polite by holding on and helping them. If they want your services they should pay you for them.

    On the other hand you should give the letter of disengagements to your client get them to sign it and then forward a copy to the accountant.

    And there is clarity at what you are finished and what the other accountant has to do. Good riddance to bad accountancy clients as there are always better clients around the corner.
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