Who pays accounts fees as client is bankrupt?

by **Buzz_02** on Tue Jun 07, 2011 7:04 pm

Hi,
I have a friend who seems to be in a bit of a crazy position, they work at a very small accountancy firm and been told by inland revenue that they need to provide various accounts information (10 years’ worth I believe which is more than the legal requirement to keep?)

Apparently the client is responsible for paying the cost, which is fine if they were not bankrupt, but as the client is already bankrupt, there would be no way of receiving a payment from the client.
As for as I understand this work needs to be done without payment as you cannot charge a bankrupt client (or if you do you never get it)

Surely the Inland Revenue should be responsible for paying in these circumstances for the account to be done as the request come from them not the bankrupt company?

by **pawncob** on Tue Jun 07, 2011 9:14 pm

It is up to the taxpayer to provide any info that HMRC request, not the agent. If the agent refuses to provide the info, HMRC have no remedy against the agent. If the client (or his receiver) is prepared to pay for the agent's time in providing the info, then all parties are accommodated. If not, it falls back on the taxpayer.

by **tom 7000** on Wed Jun 15, 2011 6:53 pm

Yes what pawncob said. Im surprised the accountant didnt realise this. When doing investigations, get cash up front, when that runs out v charges made, ask for more, if its not paid, just call tax inspector and say , sorry cant help further he hasnt paid...mostly they just chuckle..especially when you say ''GOOD Luck '' at the end