October 26th, 2012 / Insight posted in

Accountant denies access to our company records

HS writes: I need to retrieve my company´s records from my accountant so I can complete my accounts, which are already overdue at Companies House. The accountant had been preparing my Vat returns but we have fallen out over fees. He refuses to return the records until he is paid. Can he do this?

Your accountant is seeking to exercise a “lien” or right to another´s property until a debt is paid – in this case your records, presumably for work on them. But where the outstanding fees relate to work other than accounting, such as the Vat returns, he cannot exercise the lien in this way. Recent legal decisions have held that it is not permissible to exercise an otherwise valid lien if it causes a client to breach his statutory obligations. For example, section 222 of the Companies Act 1985 says accounting records must be accessible to directors at all times. In your case, they are not. Furthermore, you are likely to incur Companies House fines if you miss the filing deadline. So write to the accountant, highlighting these points. If he still refuses to release your records, complain to his professional body, which should enlighten him. Of course, the best solution is to resolve the dispute with a compromise.