Other Client Handling Issues

Question 1

You provide advice to a client and their brother with a similar business wants to use the advice, what do you do?

Answer 1

You should indemnity from your client in respect of any use of the advice by their bother

Question 2

You are holding a cheque for a client in respect of fees owed and paid in advance, what do you do?

Answer 2

Bank the client cheque and then draw out the amount due

Question 3

What is the PRPG threshold for degerming whether a client needs a separate account for their money?

Answer 3

Either £1000 held over 60 days or £10,000 held over 30 days

Question 4

According to advice on handling client money, ow often as a minimum should each client account be reconciled against the balances on that client’s ledger?

Answer 4

Every 6 months

Question 5

PRPG guidance on tribunals and advocacy advises a member representing a client before the first-tier tribunal and upper tribunal to consider legal counsel in what situations?

Answer 5

Where there is likely to be an appeal
Where tax evasion is involved

Question 6

If a member advises a company, circumstances may arise in which shareholders wish to rely personally on tax advice given to the company, what should a member do in this instance?

Answer 6

The member may be able to bind the shareholders into an engagement letter with the company

Question 7

You are being engaged to prepare corporation tax returns for a client, they are VAT registered and have four full time employees, all of whom are shareholders. What should you exclude from the EL?

Answer 7

VAT return preparation
Personal tax advice to employees

Question 8

When might you seek indemnity from a client through drawing up an EL?

Answer 8

Against the member by a third party who has sought to rely on the member’s advice to the client

Question 9

What should you do when subcontracting work?

Answer 9

Have an appropriate engagement letter in place
Understanding who reports to the client

Question 10

What are the potential issues when a fellow tax advisor asks you take on work for their client that they are not competent to do?

Answer 10

Establishing to whom you should report
Maintaining client confidentiality

Question 11

What should you do when asked to undertake work which is not in your competence?

Answer 11

Endeavour to refer the client to another adviser
Make it clear that you will not be responsible for any work done by another adviser as a result of the referral

Question 12

When client’s money is kept separately from money belong to the firm, what should the title of the account say?

Answer 12

The title of the account must include the client’s name and the word client

Question 13

You will receive money from a client totalling £2300, £500 will be your own and £1800 is client money, what should you do?

Answer 13

Transfer the full amount to the client amount and then £500 to your own account

Question 14

How can you deal with a client’s money once received by HMRC?

Answer 14

Pay immediately to the client
Pay immediately into the appropriate client account
Hold it against future fees if the client instructs this

Question 15

When should client money be put into an interest bearing account?

Answer 15

If held for 30 days and over £10k
If held for 60 days and over £1k

Question 16

You have received £15k from a client, what kind of bank account should it be kept in assuming it is expected to be held for 20 days?

Answer 16

Must be interest bearing account unless in the member’s own judgement the interest arising will be immaterial in amount

Question 17

How long should records of reconciliation be kept and from when?

Answer 17

6 years of the final transaction recorded in the reconciliation

Question 18

What is an example of an administration of justice in which confidential information can be released?

Answer 18

Disciplinary proceedings

Question 19

You are asked to represent a client before the upper tribunal, what should you consider?

Answer 19

Whether you are competent to undertake this

Question 20

Even if you feel competent to represent a client at the FTT or UT, if it is likely that there will be an appeal, what should you do?

Answer 20

Consider carefully whether counsel or a solicitor with a high court advocacy certificate should be briefed, even for the hearing before the FTT or UT