Corporate Accountant's Reposibility

I'm hiring an accounting firm for doing my annual accounts and after switching to a new firm this year.
My company got 123K gross VAT'able income for the accounting period (resulting in 23.5K VAT liability), I paid 20K as VAT as the rest 2,300 were offset by a company purchase where VAT was paid. When doing my annual accounts I ended up with the loss of 2,300 because of that purchase wasn't taken into consideration.

Is that a norm that an accountant would take the responsibility for calculating my taxes (both in terms of corporate and personal taxes) or they've been a bit over-responsible?

Hi Archip

I would say that it's far more likely that your accountant has calculated your profit and tax correctly than you have.

Most people don't understand accounting or tax and it's quite hard to explain it to them as well.

That is not to say that you should not question your accountant. You should and you should try to understand the accounting entries.

Brendan

Hi Brendan appreciate that. Leaving aside the level of understanding, my question was should they do that or they shouldn't?

Archip said:

I'm hiring an accounting firm for doing my annual accounts and after switching to a new firm this year.
My company got 123K gross VAT'able income for the accounting period (resulting in 23.5K VAT liability), I paid 20K as VAT as the rest 2,300 were offset by a company purchase where VAT was paid. When doing my annual accounts I ended up with the loss of 2,300 because of that purchase wasn't taken into consideration.

Is that a norm that an accountant would take the responsibility for calculating my taxes (both in terms of corporate and personal taxes) or they've been a bit over-responsible?

Click to expand...

I don't really understand your question. Are you suggesting that your accountant should have included the VAT element of your purchases as a cost in your annual accounts, when in actual fact you've recovered that cost as a deduction against your VAT liability?

The title of this thread is very misleading too.

Let's start by assuming the first paragraph is irrelevant, 'cause it makes no sense anyway!

I expect the questions are:
- Should the accountant do the corp. tax calculation?
- Should the accountant do the personal tax calculation?

And the answer is that he would definitely need to at least to do estimates to complete the payroll entry and the corp. tax entry to complete the accounts, but that is all. Beyond that it will depend on what you contracted him to do.

You should have got a letter of engagement from him setting out exactly what services he was under taking to provide. You need to check there to see what he should do.

Thanks Jim.