My allegations against Simon Hathaway FCCA of Cooper Hathaway, last known to be trading from 93-97 Regent Street, London, arise from his incompetent and negligent handling of taxation matters arising from the sale of my business. The details of this case are particularly poignant as Cooper Hathaway were primarily appointed to investigate the incompetence and negligence of my former accountants, Lake Bushells, of Colchester, who have since been found guilty of negligence by the Association of Chartered Accountants.
My allegations are primarily against partner Simon C.Hathaway FCCA:
- I allege that Cooper Hathaway were negligent in handling my affairs by virtue of failing to deal with matters on a timely basis and by failing to give the advice that might reasonably have been expected of them. Due to their delays and poor advice, the accrued interest on a Capital Gains Tax liability increased by £23,847, according to the Inland Revenue interest computation.
- I allege that Cooper Hathaway failed in their duty of care to me by failing to verify or validate the outstanding liability with the Inland Revenue, or to correctly advise me with regard to settling my liabilities with the Revenue.
- I allege that Cooper Hathaway agreed a share valuation with the Inland Revenue without my specific knowledge or permission and without validating or confirming the figures with me.
Cooper Hathaway was formally appointed to handle my taxation affairs on 30th March 1999. Their primary brief was:
- To investigate an alleged outstanding capital gains tax liability.
- To investigate whether former accountants, Lake Bushells of Colchester, had been negligent in handling my affairs.
- To file formal complaint with the Institute of Chartered Accountants should they they be of the opinion that Lake Bushells had been negligent.
Details & Background
In late 1998, I found that I was liable to a capital gains tax bill which included around £150,000 of Inland Revenue interest charges. I had no knowledge of any outstanding liability.
The outstanding tax account related to the sale of shares in my business, 10 years previously. I had understood that this matter had been fully resolved six years previously. Suspecting that my accountants, Lake Bushells, had been negligent, I sought legal advice. As a result, Cooper Hathaway (then trading as Pethybridge Tarn, from the same Regent Street address) were appointed on the advice and personal recommendation of solicitor, Dennis Cooper of David Parry & Co. of Grays in Essex. Although I knew nothing about Pethybridge Tarn/Cooper Hathaway, I agreed to their appointment primarily as a result of my solicitor's recommendation and in the reassurance and belief that the firm were Chartered Accountants.
My letter of appointment clearly states that Cooper Hathaway were appointed "to take over my accountancy affairs and act on my behalf in connection with various matters". They were entrusted to resolve the capital gains tax matter by establishing the exact current situation with the Inland Revenue, negotiating a settlement and advising me accordingly. As so-called forensic accountants, they were additionally instructed to investigate the handling of my affairs by previous accountants - Lake Bushells of Colchester, Essex. The Investigation Committee of the Institute of Chartered Accountants in England & Wales has since found a prima facie case of negligence against two senior partners of that firm.
Within days of receipt of the Lake Bushells correspondence files, Simon Hathaway confirmed to my solicitors that Lake Bushells had been clearly negligent. Over following months, there was correspondence between Hathaway and my solicitors regarding the matter and with solicitors acting for Lake Bushells. There was no direct communication between Cooper Hathaway and myself initially and both I, and my solicitor, believed that Hathaway was in constant negotiation with the share valuation department of the Inland Revenue. During our initial telephone conference, from my solicitor's offices, Hathaway had instructed me to pay nothing and do nothing, until he had investigated the affair properly. At that time, the Inland Revenue had made no direct approaches to me, issued any notice of liability or made any requests for payment of any kind.
More than a year after appointing Cooper Hathaway, I had received no direct communication from them. Then, out of the blue, I received a letter from the Inland Revenue, informing me that the case was to be put to the General Commissioners. I faxed Hathaway immediately, asking if Cooper Hathaway had instigated this. He replied confirming that he had instigated the hearing. This turned out to be a blatant lie, as the meeting was entirely instigated by the Inland Revenue due to Cooper Hathaway's failure to respond to the Revenue. Cooper Hathaway claim in defence that they instigated the meeting by ignoring the Revenue correspondence, thus forcing the Revenue to bring the matter to the General Commissioners attention. This neatly sum up the sad logic and service that typifies the "professional" practice of Cooper Hathaway.
A few weeks after this incident, the Inland Revenue sent a 'Notice to Pay' for nearly half-a-million pounds - around double the liability expected. I immediately telephoned the Cooper Hathaway office, but Simon Hathaway was not available. An assistant agreed to contact him and subsequently returned my call. She informed me that Hathaway said to pay nothing until he had checked the figures. The following day, I received a letter from the senior partner of the firm, Dennis Cooper, saying that Hathaway would contact me when he returned to the office. The main purpose of his letter appeared to be the matter of an unpaid account of a paltry £529. It turned out that the account had been sent to my solicitors, not myself. I had no knowledge of it and no statement had been issued. I settled the account by return.
In early August 2000, the Inland Revenue's Debt Management department telephoned me, asking about payment of the account. I advised them that I was waiting for confirmation of the figures from my accountants. I immediately faxed Hathaway, informing him and asking for his urgent advice. I eventually received a brief note claiming that he was in negotiation with the Revenue ".. awaiting to see if I have any further scope in mitigating interest and will advise you next week as to my intended course of action..". He never contacted me again. Hathaway's statement was highly misleading - the correspondence and Revenue testimony prove that Hathaway was not in contact with the Revenue in any way or form.
The records clearly show that throughout the ten year history of this matter, I responded to all correspondence from the accountants and/or Revenue by return of post and was clearly anxious to settle all liabilities as rapidly as possible. I had no wish to be indebted to the Inland Revenue and was not comfortable with having an outstanding substantial liability, particularly if that was attracting interest. When the Revenue telephoned for the third time, in mid-September, I consequently decided to pay the account, in full, without the benefit of Hathaway's advice. I therefore paid the debt without any professional confirmation that the Revenue figures were correct.
At this point I demanded an investigation of the matter. Having little confidence that I was being told the truth, I insisted upon the return of all correspondence files to enable me to fully investigate the matter personally. The Inland Revenue were very helpful and supplied copies of all missing letters and transcripts of telephone conversations between themselves and Cooper Hathaway.
It is clear from information provided by the Revenue Shares Valuation Division at Nottingham, and my local tax offices, that Cooper Hathaway's only communication with the Revenue was one copy of the same letter to each tax office, advising them that Cooper Hathaway had been appointed to act on my behalf and requesting copies of correspondence with Lake Bushells. There was no other written communication with the Revenue. Cooper Hathaway did, however, respond to two telephone calls initiated by the Revenue, asking if 'we' agreed the share valuation. At no stage did Cooper Hathaway discuss this with me or seek confirmation that I was prepared to accept the figure. Similarly, Hathaway never notified or discussed with me the figures proposed by the Revenue, or what the liability would amount to.
My 400-page evidence file makes it totally obvious that Hathaway's opinion of Lake Bushells management and handling of my affairs, although accurate, was based upon a cursory examination of the initial supplied correspondence files. The documents in the files were in random order and considerable portions were missing. Copies of over two dozen letters were provided by the Revenue. The missing letters and random order meant that it was impossible for Cooper Hathaway to have investigated the matter properly. Worse still, they verbally accepted the Inland Revenue share valuation without any discussion with myself, and without my authority to accept the figures.
Finally, investigation of the evidence proves that despite clear evidence, Cooper Hathaway failed to file the formal complaint about Lake Bushells with the Institute of Chartered Accountants in England & Wales, as instructed.
Cooper Hathaway's only defence appears to be their claim that they were only only instructed to obtain the correspondence and documentation from the Inland Revenue and to give opinion on whether Lake Bushells were negligent in dealing with my affairs. My letter of appointment to Simon Hathaway and their own letters of notification to the Inland Revenue totally disprove this point. They have presented no further evidence or testimony to defend their actions.
Click here for the findings of the ACCA.
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