accountant ripping me off

[scoob101]

Four and a half years ago I set up my own business and went to see an accountant to sort out everything for me. They set up the company for me and we agreed on a monthly direct debit for them to do all my books, tax, vat, wages etc for me.
Now 2 months ago with the way the business world is I deceided I needed to cut my outgoings, so one of the things I did was look at the cost of my accountant, which I found nearly 50% cheaper elsewhere. So I got in touch and told them I would be leaving them and for them to get all my stuff together so I could pass it on to my new accountant, they said fine no problem.
Next thing I get a bill off them for �2800 !!! When I queried this they said it was for underpayment from the day I started my business up till the day I left.
Now they never sent me a bill at the end of any of these years to say I had not paid enough but just let it keep rolling over.
Also how can they say I was underpaying when I told them I wanted to do everything and they set the price.

[scoob101]

Now I was paying them �212 direct debit every month and the business only consists of myself and my business partner.
Are they ripping me off and if so is there anything I can do.

[scoob101]

Oh and by the way we never missed or were even late with any of their payments.

[buildersmate]

What contract document have you got that sets out what they will do for �212 per month?

[scoob101]

we just have a letter saying everything is included for the direct debit amount. The thing that really gets me is if at the end of the first year they had said I owed them money I would have paid it and moved accountants immedietly. What would I have owed if I had stayed with them for another 10 years and then deceided to leave???
Surely it cant be legal to just throw this bill at us when we have received no bill for the last 4 years.

[buildersmate]

The letter cannot just say 'everything is included for �212'.
It must either set out what services are included or refer to something else that details the services to be provided.
Having sorted out that, you can go back and demand a breakdown of what the additional charges are for.
Then you can decide whether it is a reasonable invoice or not.
I agree your accountant is on thin ground, but you are going to have to work at establishing what you contracted for in the first place.

[jen78]

In addition to that I'd ask them when the terms were sent to you about what ever it is extra they are now charging for and your agreement to pay it and on a seemingly deferred basis given the delay with reference to your written agreement (copy of the letter) and your reliance on it in the form of the monthly payments made (do you have proof of paid invoices?).

I'd ask for a full and detailed written response and breakdown to include the details of who you can take the matter up with should you have any issue with what is being proposed.

[scoob101]

When I said "everything" I meant VAT, tax, wages, ni and audit insurance.
We have asked for a breakdown but as of yet have not received anything.
They got in touch today and said if we stay with them then they will write off the bill and reduce our rate !!!!!
I asked them to put this in writing, so they are doing a letter and sending it on to us.
I have no intention of staying with them as I couldnt trust this company anymore.
By the way this is quite a large company with many offices around the area one of which is very large.

[Skyline D]

I'm an accountant and I absolutely wouldn't recommend you do any business with a firm that conducts themselves in this way.

I also wouldn't pay the bill, although the effect of not doing so will undoubtedly be that they will refuse to co-operate with the new accountant and hold on to records. If the firm in question is a 'Chartered' one licensed by one of the Institutes I would ask them to get involved. They will check whether the firm have complied with fair feeing and whether they are within their rights to retain your records. They can force them to comply if they aren't being reasonable.

If the accountant involved is not a member of an Institute then it was probably a costly mistake to use such a firm!

It's not the end of the world, your new accountant should be better able to advise you what to do than anyone on the Answer Bank. There are ways and means for the new accountant to do your work without co-operation from the previous one. You should have copies of tax returns and old accounts yourself. The Revenue will provide them to the new accountant if needs be. It's a pain but it can be done (althoguh it may well mean additional fees from the new accountant who will have quoted on the presumption that all the information is to hand).

[scoob101]

Thanks Skyline, that makes me feel much better.
They are chartered accountants and I am not paying their nonsense bill, I would bust my company first. Its been a very hard year for my company (as most in the building industry) and we have only taken minimal wages for most of the year to keep the company going and living off our savings so there is no way that I am going to hand over money to someone who has nt earned it.
I will let you know what happens when its all sorted out.