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Solving a dispute with your accountant


Common problems that company directors have with their accountants

It can feel very stressful if you’re unhappy with your accountant, and believe that you aren’t getting value for money. This is an important business relationship that can make a huge difference to your company’s fortunes when it is positive and productive.

When the opposite is true, however, the long-term implications are worrying , and it can be difficult to know what to do.

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What should my accountant be doing for me?

When you first hire an accountant, they usually provide a letter of engagement to outline their terms and conditions of service. So apart from the obvious areas of minimising your tax liability and filing statutory returns/accounts, what other tasks might they undertake?

  • Dealing with correspondence from HMRC and Companies House
  • Providing advice on tax planning
  • General bookkeeping (unless you hire an independent bookkeeper or use in-house staff)
  • Administering the company’s payroll, and dealing with Real Time Information requirements
  • Registering the company for VAT when the threshold is reached
  • Providing professional references

So what could go wrong in this relationship? Here are some of the common complaints we hear from directors, plus an idea of what to do should you find yourself in a similar situation.

“My accountant charges too much”

How much an accountant charges for their service is usually based on factors such as the business structure, how logically your financial records are set up, and whether you carry out any financial administration in-house.

If you feel your accountant is over-charging you, it’s a good idea to check their fee policy. If it is time-based, you may be paying more than the average, especially if your accountant is carrying out basic bookkeeping tasks. Completing some financial administration in-house can save money if you have staff capable of doing this type of work.

You might also want to consider a fixed fee arrangement so that you know exactly how much you’ll be paying for your accountant’s services.

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“My accountant is not chartered”

It’s a common misconception that limited company accounts need to be prepared by a chartered accountant. The truth is, as long as they are submitted in the correct format for Companies House and are signed by the directors, an unqualified or part-qualified person can complete them.

You may find that using a firm of chartered accountants has many benefits, but in general, they charge higher fees than someone who is unqualified, particularly if you use them to complete basic bookkeeping tasks.

“My accountant has been negligent”

If your accountant has failed to keep up with the latest tax changes, and either offers poor advice or makes a mistake in calculating your tax liability, you might be wondering if they can be held liable.

It may be possible to take them to court if you’ve suffered a significant financial loss, and they have admitted their error.  The level of compensation often depends on whether they have professional indemnity insurance in place, however.

We also hear complaints about accountants being unreliable, or simply not proactive enough. For example, if they have not have filed your accounts in time, you may be facing a financial penalty from HMRC.

They should provide reminders about the key filing dates and other important financial administrative tasks to be carried out during the tax year, so ask them if they can do this to minimise the risk of HMRC penalties.

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“Should I change my accountant?”

There may be good reason to change your accountant if you’ve been unhappy with them for some time, or if a particular error has caused financial difficulties. Switching accountants isn’t difficult, and although it may seem to be a bold move, finding a more suitable alternative who adds value will reap rewards in the long-term. 

How to change your accountant?

When looking for a new accountant, it’s worthwhile finding out if they have experience in your sector. If so, they could be instrumental in improving the company’s profitability, and be able to offer specific advice regarding tax-savings.

If you decide to change, you’ll need to contact your existing accountant explaining that you wish to cancel their services, and requesting they provide the information needed by the person or firm taking over.

The new accountant will then write to ask them if there is any reason why they shouldn’t take you on as a new client, also requesting the books and all paperwork.

“My accountant does not save me any tax”

Your accountant should understand the tax system, and provide the right advice to maximise any deductions. Keeping down your tax liability is one of the main reasons for hiring a company accountant, and if they are not adding value in this way it could be due to a lack of understanding about the business, or the industry in which you operate.

You could try explaining your concerns, and if there’s no improvement or consideration of your tax worries, it might be worthwhile finding someone with more in-depth knowledge.

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“My accountant is not up-to-date with technology”

If yours is a forward-thinking business that keeps up with new technology, you’ll probably find it difficult to accept that your accountant relies on older ‘traditional’ ways of working.

The accountancy profession has been reshaped by technology in recent years, and companies often look to their accountants for guidance on which business software to choose.

A lack of compatibility in this respect can make the professional relationship frustrating and discouraging for you as a company director. You should talk to your accountant to find out if they have any plans to update their practice – they may be intending to employ new staff to bring about this change, for example.

Real Business Rescue helps company directors who are struggling to control their business debts. Out team of insolvency experts provide unbiased confidential advice, and will ensure that you understand all your options. We offer a same-day meeting free of charge, and work from 36 offices around the country.

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