SA Accountant Withholding Tax Return Paperwork

[shane wharton]

I have recently terminated my accountants services due to closure of business.

I am currently undertaking a debt consolidation agreement and my wife is going bankrupt as a result of business debts. The question is: We currently owe money to accountant for fees relating to 2014 - 2015 services. Both the accountant and ourselves have agreed to a fortnightly payment arrangement to pay off the debt. The issue is that until my personal and business tax return has been completed for 2013 - 2014 I the debt reduction agreement can not be completed.

The accountant is withholding sending through any paperwork or information regarding income or expenses for the 2013-2014 year. I have been told that he has the right to retain any work he has done, but, he apparently is legally bound to hand over anything that he received from us.

Another question is the debt is for 2014-2015 year not 2013-2014. The accountant has been paid for that financial year. Would he be legally bound to hand over all reports and information for the year regardless of whether we owe him money for the current financial year.

 

[Tracy B]

Hi Shane,

First question:

The accountant is able to retain possession of documents relating to your file under a lien. This is a concept recognised under general law. Essentially, it occurs when a professional service has been rendered but payment has not been obtained. In order to obtain payment, the professional service provider can (i) exercise a lien over all documents belonging to the client that is currently in the service provider's possession; and (ii) any work belonging to the service provider that is supposed to be released to the client, until payment has been received (or alternative agreement has been arranged).

The Chartered Accountants group have a great article on which documents belong to accountants and which belong to clients but can be retained in a fee dispute: "Fees disputes and document ownership"

Second question:

The accountant should not exercise a lien over: (i) documents belong to anyone other than the client; or (ii) documents relating to a previous financial period and not the financial period in which fees are owing. Again, the article linked above will explain this further.

 

[shane wharton]

Thank you for your help. I will look into this now. Regards Shane