JP writes: I have discovered that my company has been overcharged by our accountants. Several years ago we changed our year-end and the accounts were drawn up for an 18-month period. However, the fee for the accounts for the following year was exactly the same as the fee for the preceding 18-month period. We have examined all the invoices rendered by our accountant since 1989 and estimate that we have been overcharged by £20,000. How should I tackle the problem?
The terms for fees should have been set out by your accountant in a letter at the start of your relationship, writes Moira Hindson, litigation support partner at Kingston Smith. Most accountants calculate charges by applying an hourly rate to the time taken to perform tasks. Your fees will depend on the amount of work done, rather than the number of months covered by the invoice. To assess whether the fees charged by your accountant are justified, you should ask him for an itemised breakdown. This should identify who carried out the work and when, the nature of the tasks performed, and the time taken. If it is apparent that you have been overcharged, your only hope of recovering any money may be to take legal action. However, the standard of proof required to justify fraud is high. The cost of taking such action would almost certainly exceed the amount lost, particularly as your company will have benefited from tax relief on any overpayments. Your best course may be to forget the past and start afresh by formalising your relationship with your current accountant or finding a new firm. If you believe that your accountant has acted dishonestly, you can complain to the Institute of Chartered Accountants in England and Wales or to whichever professional body he belongs.