A bookkeeper can be liable for damage caused by careless performance of the agreed work. First establish who had to supply which data, which tax returns the bookkeeper was to take care of and which deadline applied. A tax assessment is not in itself proof of an error.
What exactly did your bookkeeper have to do?
A bookkeeper may process the accounts, prepare the annual financial statements or take care of tax returns. That does not automatically mean that they also have a full tax advisory or supervisory role. The engagement letter, invoices and established way of working give guidance. A change in your business or a new arrangement made by email may also be relevant.
Also consider whether the bookkeeper should have pointed out that information was incomplete or that advice from a specialist was needed. A limited engagement does not make every warning superfluous. Conversely, missing data that you were supposed to supply may affect the assessment and the apportionment of the damage.
Late or incorrect tax return
With a late tax return, the extension scheme, the date the records were supplied and the confirmation of receipt are important. Check whether the bookkeeper actually filed the return and whether an error message was received. A draft return or a message that something is ‘ready’ is not the same as successful filing.
With an incorrect tax return, it must first be examined whether a correction, an objection or another tax remedy is possible. Have the tax time limits monitored separately. A dispute with the bookkeeper does not suspend your obligations towards the Dutch Tax Administration (Belastingdienst). Gather the original data and the version that was filed, so that it becomes clear where the difference arose.
Can the tax penalty be recovered from the bookkeeper?
Not as a matter of course. Examine the reason for the penalty, whether it can be challenged and what share the bookkeeper and you yourself had in it. An avoidable default penalty (verzuimboete) caused by a missed tax return may be assessed differently from a penalty for culpable conduct (vergrijpboete) in a file with incorrect information from the business owner.
The tax that you would also have owed with a correct return is generally not damage caused by the bookkeeper. Additional interest, remedial work or a lost tax opportunity require a separate calculation. Avoid presenting tax, penalty and interest as a single unspecified amount of damage.
Errors in the accounts and remedial costs
With incorrectly booked turnover, bank transactions that have not been reconciled or incorrect VAT processing, a successor bookkeeper may carry out remedial work. Ask for a breakdown between necessary remedial work and regular administrative work. You might have incurred costs even without the error. Only the additional costs reasonably caused by the error come into consideration.
Limit the damage by switching in good time or agreeing on remedial work if necessary. Keep a copy or export of the accounts before any changes are made. That prevents the original error from being impossible to reconstruct later.
Evidence checklist for business owners
- Engagement, general terms and conditions and division of tasks.
- Proof that records were supplied and reminders from both sides.
- Tax returns, confirmations of extension and receipts.
- Tax assessments, penalty decisions, interest calculations and decisions on objection.
- A report or specification from the successor bookkeeper.
- A breakdown of the tax that was owed in any event and the actual additional loss.
Bookkeeper or accountant: does it make a difference?
Yes. The title of accountant is protected, and accountants are subject to their own professional rules and disciplinary law. Not every bookkeeper is an accountant. In both cases, the civil duty of care depends on the engagement and the circumstances. Read more about the liability of an accountant or incorrect tax advice if that fits your file better.
Frequently asked questions
Does my bookkeeper have to pay the entire tax assessment?
Usually not. Compare the assessment with the tax that would also have been owed with a correct approach.
What if I supplied documents late?
That may be relevant to the question of error and to the apportionment of the damage. Check which warnings were given and whether an extension was possible.
Are the general terms and conditions decisive?
A limitation of liability may be relevant, but whether it applies, how it should be interpreted and whether it is valid must be assessed separately.
Time limits, costs and your next step
Report the suspected error in good time and in concrete terms. A complaint and interrupting the limitation period are different acts. For claims for damages, a period of five years after actual awareness of the damage and of the liable person often applies, but special rules and other time limits may apply. Have the time limit for your own file checked.
Responsible lawyer: Onur Arslan. Contact us with a brief description and any urgent deadline. Discuss in advance the scope and costs of the investigation, possible expert costs and litigation risks. Recovery of all costs is not guaranteed.
See also the general professional liability guide for a step-by-step plan, a file checklist and an explanation of damage, causation and complaints procedures. Legal basis: Book 7 of the Civil Code (duty of care), Book 6 of the Civil Code (compensation and the duty to complain in time) and Book 3 of the Civil Code (limitation and interruption).
