Accountants are essential to the financial management of a company. They are employed by PLCs, limited companies, and sole traders alike to provide advice on financial responsibilities such as tax liabilities to HMRC in respect to VAT, income tax, corporation tax, amongst other liabilities. They can provide advice on the financial structure of a business, how the business should operate, how to manage debtors and income etc.

If this advice is inaccurate, wrong and/or in some cases negligent, this can have serious financial consequences on a business. If any of the tax the liability which a business pays is not correct they may be responsible for higher interest rates against any outstanding tax together with fines. You will need to act quickly to recover any of those losses from the accountant that provided the advice.

What is Tax Liability?

Tax liability is the total amount owed from a business, sole trade, person or PLC that is owed to Government.

In other words, it is the total amount that you are due to pay the “taxman”. The tax liability is incurred when any income is received – when you receive a wage from your employer, when a client or customer pays an invoice, or when profit is generated on the sale of an asset.

Can I Make a Claim for Accountant Negligence?

Where there is a professional relationship between a client and their advisor, the advisor has a duty to provide you with competent advice in line with the information provided by you.

It would be expected by your accountant that when advising you in relation to a business’ financial management and financial liabilities that they provide you with reasonable competent advice as would be expected of a reasonably competent accountant. For any potential claim against an accountant to be successful, you would need to establish whether the advice they provided fell below the standard of a reasonably competent accountant. It is therefore essential to establish the industry standard.

The accountant may have a duty while exercising their advice to warn the business of any risks associated with the instructions that they provide. In situations where the accountant has failed to warn of risks, this could be sufficient to demonstrate that they failed to exercise reasonable care and skill.

What is the Process for Suing an Accountant for Negligence?

To commence a claim for accountant negligence it would be expected that you comply with the pre-action protocol for professional negligence claims. This sets out a framework that any claimant should comply with when commencing any claim against an accountant.

In summary, a preliminary notice should be issued to the accountant which allows them to commence their investigations into a claim.

Thereafter you will issue a letter of claim to the accountant setting out your claim giving a history of events, setting out what duty the accountant owed you when providing advice, and what losses were incurred. The letter of claim is an important document and should be carefully and accurately drafted.

What is the Average Pay-out for Suing an Accountant?

It is very difficult to assess what your losses may be as it is very much case sensitive to particular circumstances. We would recommend that you get in touch with our team to enable them to assess your case and be in a better position to provide you with potential outcomes.

Civil Law Solicitors in Sheffield and Barnsley

Get in touch with our Civil Team today on 0114 3583137 or send an enquiry via our contact page today.  We have offices based in both Sheffield and Barnsley but are able to undertake cases nationally.  If you are unsure whether you are able to make a claim our team will be able to provide advice and assistance on the next steps and likelihood of success in relation to accountant negligence.