An accountant negligence claim arises where poor advice, missed deadlines, or avoidable errors by your accountant result in financial loss. Whether you are a business owner, director, or high-net-worth individual, the consequences can be significant, ranging from unexpected tax liabilities to HMRC investigations and penalties.
Our specialist dispute resolution solicitors provide clients with bespoke legal advice, for those pursuing accountant negligence claims. We focus on identifying whether a duty of care has been breached, quantifying the loss suffered, and taking decisive steps to recover it. If you suspect your accountant has made a costly mistake, early legal advice can be critical in protecting your position.
What is accountant negligence?
Accountant negligence is a form of professional negligence. Accountants owe a duty of care to their clients in respect of the services they provide, and they must provide those services competently and diligently with reasonable care and skill.
It is one of several forms of professional negligence, which our wider professional negligence claims team advises on matters arising from negligent advice, missed deadlines and other professional errors.
When is an accountant legally negligent under the law in England & Wales?
If you instruct an accountant and they breach the duty of care owed to you, which in turn causes you to suffer financial loss, they may be found to be negligent.
What types of accountant mistakes can lead to a negligence claim?
Examples of mistakes by an accountant leading to a negligence claim can include:
- Providing you with incorrect or poor advice;
- Failing to inform you of relevant changes to tax law;
- Missing important deadlines;
- Making errors when preparing documents and submitting information to HMRC;
- Miscalculations (e.g. payroll or VAT errors); or
- Over or under-valuing company assets.
The accountant’s negligence may result in an investigation by HMRC who may then issue you with a penalty.
Mistakes can happen, but if a mistake by your accountant causes you or your business to suffer financial loss, you may have grounds to bring a claim for negligence against your accountant.
It is not enough to just suffer financial loss (e.g. receive a fine from HMRC). You would also need to show that the financial loss would not have occurred if it wasn’t for the negligence of the accountant.
If the financial loss would have happened anyway, for example, due to circumstances outside the accountant’s control, it’s unlikely that you will be successful in your claim.
Do accountants owe a duty of care to businesses and individuals?
You may instruct an accountant in your personal capacity or on behalf of your business, or both. The accountant will owe a duty of care to whomever they are instructed to act on behalf of.
If you are a director and/or a shareholder of a company, you may be able to bring an accountant negligence claim personally if you have suffered a personal loss, which is separate to any loss suffered by the company.
In addition to demonstrating that you’ve suffered such loss, you would also need to show that the accountant owed you a duty of care as an individual, separate to the duty of care they owed to the company.
I’m unhappy with the service provided by my accountant, is that enough?
No. Simply being unhappy with the service you received, such as your accountant being slow to communicate with you or there being delays which ultimately did not result in you suffering any financial loss, won’t be sufficient to bring a successful claim for negligence.
You will need to show that the accountant owed you a duty of care, the duty of care was breached and that you suffered financial loss as a direct result.
How much is an accountant negligence claim worth?
This will depend on the nature of the negligence and financial losses suffered. However our dispute resolution team can assist you to assess your claim for a fixed initial fee.
Is there a time limit for bringing an accountant negligence claim?
Generally, you will have a period of 6 years to bring a claim. The clock starts running from the date you suffer loss as a result of the negligent act.
If you didn’t discover that your accountant had acted negligently until a later date, you may be able to bring a claim within a period of 3 years running from the date you first knew or were capable of knowing there had been negligence.
It doesn’t matter if you knew your accountant was “negligent” in the legal sense, just suspecting something was wrong with the accountant’s advice or the work they carried out may be enough to start 3 year period running.
If you don’t bring your claim within the relevant limitation period (i.e. within 6 years from the date of negligence or within 3 years of first suspecting that there had been negligence), you will generally not be able to proceed with your claim.
Reporting your accountant to their regulator or making a claim in line with their complaints procedure will not be enough to show that your claim was brought in time.
It is therefore very important to take legal advice as soon as possible when you become aware of any negligence by your accountant, or when you suspect something is wrong, so that you don’t miss your chance to bring a claim.
What evidence do you need to make an accountant negligence claim?
The key evidence will depend on the negligent act by the accountant; the most common forms of evidence include:
- Documents – e.g. forms that have been filled out incorrectly; documents showing an under or over-valuation of the company’s assets
- Correspondence – e.g. letter of advice which sets out negligent advice; emails where you were incorrectly advised of deadlines
- Copy of any engagement letter received from your accountant - this will help evidence the scope of the accountant’s instructions and duty of care
- Financial records
It is very important that you retain all documents that could potentially relate to your claim (including all hard copy and electronic documents, such as computer files, emails, text or WhatsApp messages), even if you personally don’t consider it to be relevant or if you consider it to be confidential.
You must not take any steps to destroy any documents.
If you or your company has any process in place for the automatic deletion of documents, it is important to suspend this straight away, so nothing gets deleted accidentally.
If you bring a claim and settlement is not achieved at an early stage, you will be obliged to disclose certain documents as part of the claim process. If any disclosable documents are destroyed, even accidentally, this could have a negative impact on your case. It will be for your legal team to decide what documents are relevant for disclosure and they will advise you further on this.
What if my accountant denies liability or blames HMRC?
The claim will proceed as a defended claim. The process to be followed will depend on various factors and your legal team will advise you accordingly.
Will my accountant be insured?
Typically, yes. Most accountants will have Professional Indemnity Insurance in place to cover claims such as negligence. However, it will be important to establish this at an early stage.
If your claim was successful and the accountant was insured, you would expect the insurer to be the one who pays any compensation awarded in your favour.
Should I settle an accountant negligence claim or take it to court?
This will depend on a number of factors including the strength of your claim, the settlement being offered, the value of the claim, and your own personal circumstances. There is no one-size-fits-all approach; every case will turn on its own facts.
Contact a Solicitor about your Accountant Negligence Claim
If you believe you may have grounds for an accountant negligence claim, taking early, informed advice can make a significant difference to the outcome. Our dispute resolution team will assess your position with clarity, explain your options, and guide you through the most effective route to recovery. To discuss your situation in confidence, contact our team today by completing the enquiry form below.
Accountant Negligence FAQs
Can I sue my accountant for negligence?
Yes, if your accountant breached their duty of care and acted negligently in a way that has caused you or your company to suffer loss. You will need evidence and make sure your claim is brought in time.
How long do accountant negligence claims take?
It depends on the claim. Settlement may be achieved at an early stage. If the claim is defended, however, it may take between 12 and 18 months for the claim to reach trial, possibly even longer depending on availability of court time.
Do I need expert evidence to bring a claim?
It depends on the type of negligence. If it is a case of a missed deadline, then possibly not. If it is a case involving the under or over-valuation of company assets, then likely yes.
What if my accountant denies responsibility?
The claim will pursue as a defended claim and will usually be handled by the accountant’s insurers.
Is it worth pursuing an accountant negligence claim?
It is always worth seeking advice. Our Dispute Resolution Team can help assess your case and provide you with comprehensive guidance on your next steps.
