If you’ve suffered a financial loss because of bad advice or a mistake made by your accountant, you’re not alone, and you may have more options than you think.
Accountants are trusted professionals. When they get things wrong, the consequences can be serious: unexpected tax bills, HMRC penalties, damaged business relationships, or lost income. In some cases, the losses run into tens of thousands of pounds.
The good news is that the law recognises this. If your accountant failed to meet the standard of care expected of them, you may be entitled to claim compensation through an accountant negligence claim.
Here’s what you need to know.
What is Accountant Negligence?
Accountant negligence occurs when an accountant fails to meet the standard of care that a reasonably competent professional in their position would be expected to provide, and that failure causes you a financial loss.
It’s important to understand that not every mistake amounts to negligence. Accountants can make errors of judgment without being negligent. But where the mistake falls below an acceptable professional standard and costs you money, you may have grounds for a claim.
What Are Common Examples of Accountant Negligence?
Accountant negligence can take many forms. Some of the most common include:
Incorrect Tax Advice
If your accountant gave you wrong advice about your tax position, leading to an unexpected liability or a penalty from HMRC, that could be negligence.
Failure to File on Time
Missing tax return or VAT filing deadlines can result in automatic fines and interest charges. If your accountant was responsible for filing and failed to do so, you may be able to claim those losses.
Errors in Financial Statements
Mistakes in accounts that lead to a bad business decision, such as acquiring a company with hidden liabilities or paying too much tax based on inaccurate figures, can form the basis of a claim.
Negligent Audit Work
If an auditor failed to identify irregularities or misstatements that a competent professional would have caught, and you suffered a loss as a result, that may constitute negligence.
Poor Advice on Business Structure
Advice to structure a business in a tax-inefficient way, without properly explaining the risks or alternatives, can cause long-term financial harm.
Failure to Advise on Deadlines or Reliefs
Missing out on tax reliefs, allowances, or exemptions because your accountant didn’t flag them in time is another common source of loss.
How Do I Prove Accountant Negligence?
To make a successful accountant negligence claim, you generally need to show three things:
- Duty of care. Your accountant owed you a duty of care. This is usually straightforward if they were advising you professionally.
- Breach of duty. They failed to meet the standard expected of a competent professional in their field.
- Loss. That failure caused you a financial loss.
You don’t need to prove this yourself. A specialist solicitor will assess your case, gather the relevant evidence, and advise you on the strength of your claim.
Can I Claim if My Accountant’s Firm Has Closed Down?
Possibly, yes. Accountancy firms are required to hold professional indemnity insurance, and in many cases, this remains in place even after a firm has closed. A specialist solicitor can help you identify whether a valid insurance policy exists and pursue a claim through it.
Is There a Time Limit for Making an Accountant Negligence Claim?
In England and Wales, you generally have six years from the date the negligent act occurred to bring a claim. However, if you didn’t discover the loss immediately (which is common with accountant negligence) the clock may start from the date you became aware of the problem, or reasonably should have been aware of it. In some cases, this extends the time limit to three years from the date of knowledge.
If you’re unsure whether you’re still within time, it’s worth speaking to a solicitor as soon as possible. Time limits can close quickly, and acting early gives your case the strongest chance of success.
What Compensation Can I Claim?
Compensation in accountant negligence claims is designed to put you back in the financial position you would have been in had the negligence not occurred. This can include:
- The direct financial loss caused by the negligent advice or error
- HMRC penalties or interest charges that arose as a result
- Lost business opportunities or profits
- The cost of putting the mistake right, such as engaging another accountant to rectify the work
- In some cases, interest on the losses over the period they were suffered
How Do I Make an Accountant Negligence Claim?
The process is more straightforward than many people expect.
At CEL Solicitors, we handle accountant negligence claims on a no-win, no-fee basis. That means there’s nothing to pay upfront, and you only pay if your claim is successful.
To get started, you just need to get in touch and tell us what happened. We’ll listen, ask a few questions, and let you know whether we think you have a claim, with no obligation to proceed.
If you’ve lost money because of your accountant’s mistake, you don’t have to accept it. You are not alone.
Ready to make your accountant negligence claim? Call our team today on 0151 909 8212 or enquire online for a free, no-obligation consultation.