Accountant's T&Cs

[OwnWorst]

We are engaging the services of a UK accountant (FCA, CTA) for the first time, as a non-resident, British private couple. It will be for regularising our tax affairs on the basis of modest income/assets in the UK (one rental property) and normal income/assets in one other EU country where we are resident (i.e. two salaries and one property). The terms of engagement and T&Cs look generally reasonable but I do have the following questions about their standard terms and conditions:

- Postal communications from the accountant to us are deemed to have arrived 2 working days after the communication was sent. This is not realistic for international mail, but under which circumstances would 2-3 days here or there actually matter? Is it worth getting them to change this?

- "expenses incurred in the course of carrying out our work for you" will be added to the invoice "where appropriate". I am assuming that, for routine tax matters as mentioned above, extra expenses would not be appropriate and everything will be covered by the hourly rate. Is this a fair assumption?

- Is it usual for the client to indemnify the accountant in respect of any claim (including the cost of defending the claim) arising out of our unauthorised disclosure of the accountant's advice and opinions? Obviously I have every intention of keeping our tax affairs to ourselves, but, given the potentially large amounts of money at stake, is there any cause for concern?

Many thanks for your comments
OW

[Clitheroekid]

Postal communications from the accountant to us are deemed to have arrived 2 working days after the communication was sent. This is not realistic for international mail, but under which circumstances would 2-3 days here or there actually matter? Is it worth getting them to change this?

I would have though that these days communication would normally be by email anyway, and I can't really see that it's of any practical importance. In any event, if they do send you something important by post and it fails to arrive these T's and C's can't override the actual facts.

"expenses incurred in the course of carrying out our work for you" will be added to the invoice "where appropriate". I am assuming that, for routine tax matters as mentioned above, extra expenses would not be appropriate and everything will be covered by the hourly rate. Is this a fair assumption?

As with any professionals you have to trust the accountants to be fair, otherwise you shouldn't be employing them in the first place. From a common sense point of view they are not going to charge you expenses that are clearly unreasonable, as they know you would just take your business elsewhere.

Accountants' practices are similar to solicitors' practices, and the only expenses we normally charge are where we are actually laying out cash for a particular project, such as travel expenses, counsel's fees, court fees and so on. All day to day expenses are just part of the overheads, and are included in the hourly rate.

Is it usual for the client to indemnify the accountant in respect of any claim (including the cost of defending the claim) arising out of our unauthorised disclosure of the accountant's advice and opinions? Obviously I have every intention of keeping our tax affairs to ourselves, but, given the potentially large amounts of money at stake, is there any cause for concern?

Yes, this is fairly standard. Again, however, from a common sense point of view it's unlikely to be of any practical importance. They would only have a claim against you if your unauthorised disclosure had caused them some form of loss, and in that event they could probably sue you anyway.

[OwnWorst]

Superb! Thanks Clitheroekid, much appreciated.

Have a virtual rec [thumbs up emoji not supported]

[dickscovered]

Hi

I don't see how a UK accountant can help with regularising your tax on your incomes and property in your country of residence. Maybe you have just hired him for the UK property. I would hope so, because it is extremely unlikely that he would know much about, say, French tax on UK rental property. In principle the UK would have first rights to taxing the income and credit would be given in the country of your residence for that (assuming a DTA), but there is normally no agreement as to how to calculate the taxable income. It can quite quickly become complicated and, of course, expensive.

There are locally based firms with decent UK experience. Blevin Franks crops up as a name for France and Spain. I have never used them and imagine they would be expensive and try to sell you more advice than you need!

BTW, I am a qualified Chartered Accountant, and we are in the throes of moving back from France to the UK. So I have been dealing with cross-border tax for a while. Some of my mates in France were accountants too and frankly didn't have a clue about how things might be different in another country. The same would apply to the vast majority of accountants in the UK.

If all you are getting this firm to do is calculating your UK tax, then consider this post off topic.

Cheers in any case

[OwnWorst]

Hi dickscovered,

Thanks for your comments but yes, this is purely to sort out my UK tax liabilities.

My situation is eased somewhat by the Germans having no interest in income deriving from properties outside of Germany. And for the time being, I am not really earning anything in Germany that is of interest to the Brits. But it can get horribly complicated, even before one considers cross-border inheritance matters. UK of course, did not sign up to the recent(ish) harmonisation of such matters.

But this is all off topic - no doubt it will be the subject of a long post a few years from now.

Regards
OW (trying not to think too hard about the etymology of your name...)

[brightncheerful]

Postal communications from the accountant to us are deemed to have arrived 2 working days after the communication was sent. This is not realistic for international mail, but under which circumstances would 2-3 days here or there actually matter? Is it worth getting them to change this?

I have overseas clients, all of whom have told me how long it normally takes for post to arrive. I suggest you inform the accountants that 2 working days for international mail is unrealistic, and suggest a longer (reasonable) period. Also that you are ok with communications by email. Since email is not necessarily a secure medium, I think it advisable to tell the accountants that you have no objection for routine matters but would prefer more important stuff to be communicated by post.

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"expenses incurred in the course of carrying out our work for you" will be added to the invoice "where appropriate". I am assuming that, for routine tax matters as mentioned above, extra expenses would not be appropriate and everything will be covered by the hourly rate. Is this a fair assumption?

One would reasonably expect you to be told in advance what expenses would be incurred and the amount. I wouldn't expect an hourly rate to include expenses. I suggest making it clear to the accountants that where the expenses are likely to exceed £x (x being your reasonable maximum) your confirmation in writing should be obtained beforehand. A go-ahead and incur regardless for urgent matters if you've not replied within 1 working day should be included.

Is it usual for the client to indemnify the accountant in respect of any claim (including the cost of defending the claim) arising out of our unauthorised disclosure of the accountant's advice and opinions? Obviously I have every intention of keeping our tax affairs to ourselves, but, given the potentially large amounts of money at stake, is there any cause for concern?

As I understand, an accountant is an agent for the taxpayer. Unless you have a full audit in which case the accountant would/should be privy to all the information concerning your financial records, the accountant is only going to be able to prepare the accounts and submit the return to the HMRC and calculate the tax payable based on the information you have provided. If it should transpire that any of that information is false or information that should have been disclosed was not disclosed then the accountant would be exposed to the costs of ensuing claim/proceedings: the client indemnifying the accountant is to avoid that possibility.