Dispute with Tax Accountant over Fee - Matter Now before QCAT

Lpoorhermit on 11/01/2018 - 20:41
Last edited 13/01/2018 - 17:57 by 1 other user

Hello all,

I'm a long time lurker but first time posting and seeking the collective wisdom of ozbargainers pleasee! Warning long post ahead.

My situation is that I've refused to pay an accounting fee of $295 this year with a company that I have been for the last 3 years. Essentially I was told that for the price of $295, included in that price would be completion of my tax return AND the provision of taxation advice for the year. I have this specifically stated in an email correspondence and so I replied by email for them to proceed.

I have asked a few questions about tax and found that their replies were either taking couple of days to a week to come through and were very simple/brief, things that I found by searching the internet myself. Hence I was not entirely satisfied by what I was led to believe.

I later received the invoice which states $295 and simply states:
"Our fee for professional services rendered for the period ended 4 October 2017 in connection with:
Preparation of an income tax return for XY for the year ended 30 June 2017."
There was no inclusion of the provision of taxation advice.

When I contacted the accountant who first wrote to me and asked for a statement of that effect to be included in the invoice, she replied saying that the provision of taxation advice was something that she does out of good will. I rebutted that by providing her original correspondence to me in which she ignored promptly and simply state that payment is due as it was what I agreed to in signing "the engagement letter". The engagement letter that she speaks of is the one that I signed back in 2015 and the cost of the service back then was $50. There were also many other things in the engagement letter which was not provided to me and when I told her of this she simply forwarded to the credit department of her company who has little interest to make any reasonable attempt for coming to a mutually beneficial agreement.

I have attempted to get a 3rd opinion on this matter via the various non-legal government avenues (eg ACCC, ACIS, Financial Ombudsman Service) who frankly have been not very useful and saying that its the other parties' responsibilities. Only the Office of Fair Trading have taken an interest in my case and when they liased with the accounting company, I was advised that a lodgement has already been made to QCAT in early December and they are now seeking $408 ( 295 for "professional service", 88 for "bailiff/sheriff/service fee", and $25.45 for "filling fee"). Office of fair trading had nothing more to add after that. I have yet to hear anything from QCAT.

So in summary, I guess my questions are:
1) I attempted to resign just to avoid the hassle and pay the initial fee but the accounting company now wants $408 in order to withdraw the QCAT application. Has anyone been in similar situation with QCAT and know actually what happens with the process and outcome? Can I be expected to pay a lot more if the court rules against me?
2) Since I haven't signed any engagement letter with them this year then would I still be accountable for "rendering their service" considering then the only thing in writing would be the email correspondence? Which to them seem to mean nothing if its working against them.

Thanks to those that read to the end :)

• 

  mini2 on 11/01/2018 - 21:09

  If your accountant is either a CPA or CA, both of these organisations have their own dispute/complaint mechanism which may resolve the issue more quickly than QCAT.

  • 

    poorhermit on 11/01/2018 - 21:35

    Thanks for the suggestion. Yes they are a CA which I have already contacted but have not heard back. Thanks for reminding me I will follow up on them. However do you know if they have any "legal" weight behind them or would they be just similar to the office of fair trading?

    • 

      Brainwhacker on 11/01/2018 - 22:33

      Members are bound by the code of ethics/professional legislation, if you feel the accountant has done the wrong thing you can lodge a complaint

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  kipps on 11/01/2018 - 21:36

  +2

  Default position in QCAT is no order as to costs. The applicant might get their filing fee back. Has a settlement conference been held yet? QCAT is likely to give you a very fair run. I would let things run their course.

  • 

    poorhermit on 11/01/2018 - 21:39

    Could you kindly please explain what your first sentence mean?

    No I have not heard anything from QCAT yet. What is a settlement conference?

    • 

      kipps on 11/01/2018 - 22:38

      +1

      Means that even if they’re wholly successful they are likely to only get an order for the debt amount plus the filing fee (which should be stated on the minor debt form). They get nothing for their time for conducting the proceeding itself.

      Settlement conference is generally called to make the parties meet with someone to help them reach a settlement.

      • 

        poorhermit on 11/01/2018 - 22:53

        Thanks for the reply. Well the accounting company is asking for $408 to withdraw their QCAT application is calculated as:

        · $295.00 for Preparation of an income tax return for the year ended 30 June 2017

        · $24.45 filing fee cost for Minor dispute

        · $88.00 Baliff/sheriff/service fee

        In that case it seems like the logical thing for me to do then is to let QCAT do their thing since even if they are successful, I will still be paying the same amount?

      • 

        kipps on 11/01/2018 - 22:59

        @poorhermit: pretty much

      • 

        imcjb on 11/01/2018 - 23:00

        @poorhermit:

        Then you have the very real possibility of having a court judgement on record against you which (I believe) hits your credit score the hardest.

      • 

        poorhermit on 12/01/2018 - 00:48

        @imcjb: ok thanks i shall take that into consideration!

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  Yttrium on 11/01/2018 - 23:09

  It is easy to defend yourself at qcat , you seem like an organised person.

  You will go well at the qcat hearing.

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    poorhermit on 12/01/2018 - 00:33

    haha thanks for the encouragement.

    Sigh to be honest I just want it to be fair. When I heard their price I already know it was substantially higher for the completion of a tax return but I got persuaded by the "provision of taxation advice", thinking if I spend more money then they can help me save money via tax minimising.. how deceiving. Hence if all they are willing to do is just do a tax return (ie refusing to provide solid documentation in their invoice), I expect to pay the price for a tax return.

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  CheapskateQueen on 12/01/2018 - 00:31

  Go to the tribunal. You're being hussled. The sheriff fee is BS at this stage.

  If the email says what you say it does, fee is for lodging tax return AND advice, they can't say otherwise. You have to pay something, it's just a matter of appointment.

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    poorhermit on 12/01/2018 - 00:39

    +1

    That's what I feel. Here are the emails, one this year and the one previous. I've just replaced the job and title with abbreviations:
    " Hi XY

    Lovely to hear from you again. I hope you are well.

    Where are you in your career? Looking at my notes on file for you, can you confirm that you are a ABC? If so, our cost is $295 incl of GST. A DEF is $195 incl of GST. Our fees are tax deductible. Happy to answer tax related questions you may have throughout the year, included in this price.

    Similar as previous years – if you are due a refund, we will lodge your return ASAP with the tax office to release your refund into your bank account. If we calculate a tax payment, we will lodge your return with the tax agent lodgement extension (15 May 2018) and payment will be due 2 weeks from that date."

    Wow the one from last year is even better:

    "I hope you are well and enjoying the early stages of your career.

    We would be happy to assist you in the preparation of your 2016 tax return. The Accounting company Division specialises in the preparation of tax returns for INSERT CAREER and we are able to provide this service for a discounted price of $180. Similar to last year, this fee includes lodgement of your tax return and at any time we are also happy to assist you with queries during the year for no additional charge. Our aim is to assist like yourself in the early years to ensure you have access to quality accounting and tax advice and are structured correctly for the long term.

    Is there a suitable time next week for me to call you to discuss further? Alternatively, we can correspond via email.

    Look forward to hearing from you."

    Since this is what I was told each time, why do they absolutely refuse to simply add a statement of that effect into the invoice? My only answer is they don't want to follow up on their promise.

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  CheapskateQueen on 12/01/2018 - 00:51

  +2

  Have your circumstances changed from 2016 to 2017? I ask because the wording has changed between years in an important respect and i would argue this in your favour, especially if your circumstances are similar (ie not otherwise suggesting a price hike)

  Firstly, the reality is, is the fee they're quoting is for lodgement. Know that for the future. Forgetting that, you have an arguable position.

  In 2016 they said the fee was $180 for lodging. They said they'll also answer your tax questions at no additional charge. That wording suggests that their advice would otherwise have a separate and additional cost/value.

  In 2017, the cost jumped to 295. This time the fee was inclusive of advice. On its own, yes they're saying they'll answer your tax related questions for that entire fee. Your argument is further supported by Looking at this in context of last year. I.e you're paying a lot more this time because the fee for advice has been charged and included in the $295 whereas in 2016 you only paid $180 because the advice was added for free. This values the advice at $115. I mean truthfully she probably didn't think her words that deeply but if you want to argue, that'd be my angle.

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    poorhermit on 12/01/2018 - 01:05

    +1

    Well yes I guess you can see I got a promotion so my base salary has increased. (meaning I have more money they can rip me off >.<)

    I have no doubt that there is a cost for professional advice. Hence the way I interpreted her message was like you described, the cost was inclusive of it, and thinking that is why the price is higher than the other average accounting firms.

    And this is the accountant's reply when I raised that matter:

    "In response to me answering tax related questions throughout the year is more of a good will that I do for my clients. I am happy to do so. In respect to your question that you raised late last week to me, but I have been not in the office to respond, the response is:

    The tone I feel is a completely different from the original correspondence.

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  Smulder on 06/02/2018 - 22:27

  +1

  I am confused? You agreed to the fee of $295 prior to them commencing the work, which was to include preparation of your tax return and any accounting advice they provide.

  They then charge you the agreed $295 for their services, but they omitted the 'tax advice' description from the fee? But they are still only charging you the $295 you agreed to?

  Why would you not just pay the bill if that was the amount you agreed to? I can only assume you tried to argue that you did not receive the tax advice you expected, and therefore asked for the bill to be reduced? Otherwise, how does adding the words 'tax advice' to the bill change anything?

  Seems crazy to me… and I can't possibly imagine how the tribunal could decide in your favour?

  Anyway, good luck with with the Tribunal, and with finding a new accountant!

  • 

    Bramey on 07/02/2018 - 09:38

    I think what poorhermit is thinking, and I agree with him, is that having 'tax advice' on the invoice forces the accountant to acknowledge that included in the $295 is the right to receive proper tax advice. If it's not on the invoice the accountant has no obligation to provide any tax advice and the chances of poorhermit receiving what he is owed is slim.

    • 

      Smulder on 07/02/2018 - 10:39

      +1

      But the invoice is for "professional services rendered for the period ended 4 October 2017". This means it is for the work already provided up to that date, not for anything in the future.

      If the accountant includes 'tax advice' on the invoice, it would be for the tax advice already provided. It is not a payment in advance for the tax advice he expects to receive in the future.

      So either way, the $295 is the fee that covers everything he has received up to that date. Adding the words 'tax advice' to the invoice doesn't change what he has received. It makes absolutely no practical difference.

      If they wants a guarantee that tax advice will be included in the fee for the 12 months going forward, he should ensure it is included in a new engagement letter covering that period in advance.