I officially retired on 31 March 2008 and the salaried partner was made a full partner to replace me in May/June 2008.
Final payment for my practice premises share was agreed and my share was paid at the end of April 2008.
After the final statement for the year ending 31 March 2008 I was also duly paid my share from the capital account including QOF payment.
However, two years after leaving, I was told by the practice manager and the new accountants that my QOF payment share had been corrected to be for 2008/9 and that it should not have been allocated to me for 2007/8. Hence, I am being pursued to pay back an alleged 'overpayment'.
From what I know of QOF payments, these are given and calculated from the previous year's QOF achievement and as such, final payment for 2007/8 should have come at the end of the financial year which ended on 31 March 2008 (at the time of my retirement).
I am sure these were included in the final accounts prepared by the accountants at the time.
Moreover, the partners accepted and signed these accounts, concluding that these were correct and binding on 31 March 2008. Can you let me know if I am legally obliged to pay back the said QOF 'overpayment' after two years?
A: The accounts should be prepared on an 'accruals' basis. This means that for the year ended 31 March 2008 the accounts should not only include income received into the bank account up to this date, but should also include income that has been earned but will be received after the year end.
As you were a partner up to 31 March 2008, you are entitled to receive your share of the QOF income for 2007/8. This was paid to the practice in two stages - an aspiration payment was paid each month from April 2007 to March 2008 and then an achievement payment was paid in May 2008.
Although the achievement payment was paid after the year end and falls into 2008/9, this income relates to 2007/8 and should be provided in the accounts so that you receive your rightful share.
You will need to clarify with the accountants exactly what they are asking you to pay back. If they are referring to the achievement payment relating to 2007/8 this should not be repaid because you are entitled to receive a share of this income.
The only reason that you may need to pay some money back is if the practice received a lesser amount for 2007/8 than what had been provided for in the accounts.
However, you would need to have access to the details of the amount of QOF achievement pay included in the accounts and the sums actually received.