Strange this one but I have a sole trader client who has recently applied for a mortgage. All was going fine, SA302's sent, tax overviews sent, mortgage more or less approved. Mortgage company have now said they need an accountants certificate signed by a qualified accountant, which I'm not.
The certificate is asking for last 2 years turnover, accounts profit and taxable profit, plus current years projected, but has to be signed by a qualified accountant (AAT is listed)
So, what do I need to do, get an accountant who can re-prepare the accounts from trial balance?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
The certificate is asking for last 2 years turnover, accounts profit and taxable profit, plus current years projected, but has to be signed by a qualified accountant (AAT is listed)
So, what do I need to do, get an accountant who can re-prepare the accounts from trial balance?
Hi John
I think it is worth you seeing the actual written request for this one/challenging it as its a bit odd and could be down to the mortgage advisor mis-interpretation. They either want the Accountants report attached to the Accounts or they want the Accountant to put their neck on the chopping block for more info. (Forecasts).
I can understand the former for a limited company, less so for a sole trader.
The former might be an easy job, the latter less so for someone who doesn't know the business.
Re independent production of the accounts and sign off......out of interest, what happens if they disagree with your figures? I would think most Accountants would want to see more than just a TB before they put their signature to something, given the liability/potential claim implications, although there are some Accountants who just go off a clients software regardless. Cost will be reflective of that. Is the client prepared to pay?
Do you know someone who knows your work and would be prepared to do this for you? Thinking of perhaps one of those Accountants you have passed other work to perhaps?
Edited after you read it, but just to add a 'P' and a 'Do' - think I need a new keyboard! Or a new brain!
-- Edited by Cheshire on Friday 5th of June 2020 07:04:43 AM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I never fully understand the need for an accountant's certificate on a sole trader. So many ST's prepare their own tax returns and wouldn't even have an accountant anyway.
I know that's no help to you, just a whinge about mortgage providers!
__________________
All thoughts are my own and should not be used as professional advice.
The certificate is asking for last 2 years turnover, accounts profit and taxable profit, plus current years projected, but has to be signed by a qualified accountant (AAT is listed)
So, what do I need to do, get an accountant who can re-prepare the accounts from trial balance?
Hi John
I think it is worth you seeing the actual written request for this one/challenging it as its a bit odd and could be down to the mortgage advisor mis-interpretation. They either want the Accountants report attached to the Accounts or they want the Accountant to out their neck on the chopping block for more info. (Forecasts).
I can understand the former for a limited company, less so for a sole trader.
The mortgage advisor was as surprised as I was. He's been in business 30 years and it's the first time he's come across it. The mortgage lender is basically wanting an A4 sheet signing with the figures, but the Accountant signing needs to be qualified. I've attached it so you can have a gander.
The former might be an easy job, the latter less so for someone who doesn't know the business.
Re independent production of the accounts and sign off......out of interest, what happens if they disagree with your figures? Then I've not done my job properly!!
I would think most Accountants would want to see more than just a TB before they put their signature to something, given the liability/potential claim implications, although there are some Accountants who just go off a clients software regardless. Cost will be reflective of that.
I would expect them to treat me as a bookkeeper with them doing the accounts. Cost is not a major consideration, unless we're talking silly figures.
you know someone who knows your work and would be prepared to do this for you? Thinking of perhaps one of those Accountants you have passed other work to perhaps?
I've always done them myself, but I am aimed at micro businesses (even Ltd) My biggest turnover client so far has been £150k.
I would be telling the mortgage company to piss right off. Im not here to fill in their forms because they do not understand how to read a set of accounts and/or a tax return.
Besides there is absolutely no room on that form for the crucial line anyway, ie the Accountants disclaimer. Cheeky sods. So - no way!! (Bearing in mind said Accountant will not have conducted an audit!!)
Doug - it just states recognised qualification, so no need for a practising certificate, although it also asks for a firm name and the firm's stamp (again what effin planet?!!).
Key Q, which might prove to be an issue ...'how long have you acted for the applicant' - wont look good if you put 1 day, when its 2 years worth of accounts.
Never mind the forecasts.
I would get the mortgage advisor to earn his keep and state that you can provide a set of Accountant produced accounts that will have a signed Accountants report (but only say that if your customer will also sign them), but that the Accountant is not a member of any of the bodies listed as 'Accountant' is not a protected profession. Forecasts they can get from the client.
John, I didnt mean any offence by the '' what happens if they disagree with your figures? '' so I hope none was taken. Just that the Accountant in question might park things in a different place!
They should look elsewhere for a mortgage.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
1. Key Q, which might prove to be an issue ...'how long have you acted for the applicant' - wont look good if you put 1 day, when its 2 years worth of accounts.
2. John, I didnt mean any offence by the '' what happens if they disagree with your figures? '' so I hope none was taken. Just that the Accountant in question might park things in a different place!
3. They should look elsewhere for a mortgage.
1. Yes, I spotted that straight away, and asked the MA about it. He said he'd asked the same question and they said that was fine, it can be recent (which makes a mockery of the ML's requirements but hey)
2. Definitely not, the exclamation marks were aimed at me. I would be horrified if we weren't close to each other's figures though.
3. That's the rub, a bad credit history but he's he's knuckled down to getting things sorted and the MA couldn't place him anywhere else, otherwise I would have been of the same opinion. The house was his mum's, who died earlier this year, and he is (hopefully) buying his sister's share, so plenty of equity.
The ML has agreed to give a decision in principle subject to the certificate, but I discovered yesterday that the founder is a former chartered, so I think I'll send an email in that direction!!
Thanks ever so much for your comments (thanks also Doug and Rachel)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
