Accountant error

[george price]

My b/l are jointly owned by my wife & I, as i was paying higher rate tax prior to retirement, we allocated tthe rental income to my wife. In 1993 the tax man noticed that we had not completd a D17 form for the allocation of income, but as my accountant was a partner in large accountancy practice and explained it was his ommission it was passed ok. However, on his retirement his assistant took over and firstly said he could not find the original D17 (which we could not remember ever having to sign) then he said he found it but we would need another because we had bought 4 more b/ls. We told him to do what is necessary thats what his job is, we are not accountants. Anyway, he didn't do anything about it and has also now retired.

The new account clerks have now raised the subject and told us that because we had not completed a D17 for the 4 new properties we (I) could be presumed by the tax man to have 50% of the rental income and be liable for the higher rate of tax. on these properties that we have owned for 20 years.

I advised the accountant that this is his problem. We have paid a large accountancy practice rather than a backstreet boy to manage our affairs, we are not accountants and rely on them, and, surely their insurance should cover their error and it is not something I want to hear having retired and looking at the b/ss to supplement my pension in due course. I suggested that they get the D17 done and asvise the HMRC of their error as I am sure that HMRC will not penalise a genuine mistake.

It has been left that they will discuss with the partners and this was 6 weeks ago, meantime my wife's tax return has not been presented to HMRC yet.

Do I have any recourse if I get short shrift?

[Richlist]

It has been left that they will discuss with the partners and this was 6 weeks ago, meantime my wife's tax return has not been presented to HMRC yet.

Do I have any recourse if I get short shrift?

If I were in your shoes I would expect the accountancy firm to sort it out and reimburse you any additional taxes/ costs/ expenses as a result of the firms error.

[george price]

It has been left that they will discuss with the partners and this was 6 weeks ago, meantime my wife's tax return has not been presented to HMRC yet.

Do I have any recourse if I get short shrift?

If I were in your shoes I would expect the accountancy firm to sort it out and reimburse you any additional taxes/ costs/ expenses as a result of the firms error.

Thanks, that is exactly what I told them as well as telling them that their insurance should cover their previous employee's error and that the senior staff are also aat fault for not monitoring or supervising his work.

However, they are a big company and I wondered what recourse i would have if they refused, I obviously have not the means to fight a large company in court.

Thanks

[Richlist]

Obviously I have no idea of how much of a penalty in back taxes & fines you are likely to incur. The limit for claims in the small claims court is up to £5000 so I'm guessing this should cover it.

My experience of taking SCC action against large firms is that they always settle out of court for the full amount claimed so it ever actually goes to court.

If they start objecting to your claim make it clear you will take action and that once the action starts you will expect to get the full claim PLUS costs.

[george price]

Thank you for your kind advice, I envisage that the back tax will be well in excess of the small claims court award, so as you suggest the threat of court action and adverse paublicity may swing it.