Accountant Negligence Claims

Accountant negligence claims

Both individuals and businesses have a need for an accountant at some stage. They can be instructed for a number of different reasons, such as:

• To assist in the preparation of annual accounts for a business or individual;
• To undertake an audit function;
• To advise on tax; or
• To advise on other financial implications during the purchase of a business.

Accountants, like other professionals, owe a duty of care to their clients to perform their work with reasonable care and skill. If they fail to do this and you suffer a loss as a result then you may have a valid claim for professional negligence against your accountant.

In order to prove that an accountant has breached their duties, it is usual for a client to obtain a report from another accountant to comment on whether the work undertaken fell below the standard to be expected. This is something we can discuss and provide assistance in obtaining.

Examples of accountant negligence

The list below is not intended to be exhaustive so, if you think you have a professional negligence claim against your accountant, and you cannot see an example below, please contact us for a no obligation initial telephone assessment.

• Advising business clients to enter into tax avoidance schemes which have later failed. Put another way, a scheme whereby a company/business can seemingly minimise the impact of tax on turnover but this has been investigated by HMRC. A good example of this is a “film partnership”.
• Undertaking audit work for a business. Frequently an accountant can be instructed to undertake audit work for a company, e.g. reviewing the books and ensuring that the company reports correctly in its annual accounts. Where an accountant does not follow the correct procedure, or fails to undertake the audit correctly (e.g. they miss some fraud) the company may have a cause of action against them for this failure.
• Advising on the valuation of company assets or goodwill. An accountant can be instructed to undertake a valuation of company assets or goodwill during the sale/purchase process. If the valuation is incorrect (either over or under-valued) this could result in a loss in respect of which you may be able to claim.
• Advising businesses on tax generally. An accountant is often instructed to advise on the tax implications of various transactions. If the advice given is wrong then the client will have a cause of action against the accountant.

How we can help

Accountant negligence claims can be brought by individuals or businesses. Here at Nelsons, we have a team of experts with many years of experience in this area of law, who can help and guide you through these complicated claims from start to finish. The team are also recognised by independently researched directories, such as the Legal 500.

We have acted in numerous claims against accountants, for example:

• We acted for a small business owner who was given advice to enter into a tax avoidance scheme which actually increased his liability to tax.
• We acted for a company which wished to implement an SEIS scheme but the accountants failed to ensure the proper procedure was followed with the result that tax reliefs were not obtained.
• We acted for an individual in relation to their accountant’s failure to lodge forms with HMRC within the relevant time period in respect of his pension, meaning his liability for tax was increased by £500,000.
• We acted for a charity against their accountant when they failed to identify systematic fraud on behalf of an employee of the charity when undertaking an audit.
• We acted for a company against their accountant when they failed to advise on the tax position when selling a piece of commercial real estate.

For more information regarding accountant negligence claims, please contact a member of our Professional Negligence Claims team in Derby, Leicester or Nottingham via email or call 0800 024 1976 for a guaranteed response.