In England and Wales a client usually has six years to sue an accountant for breach of contract or negligence. For negligence where the loss was hidden, the Limitation Act 1980 allows an extra three years from when the client knew enough to sue, subject to an absolute 15 year longstop from the negligent work. Deliberate concealment removes those limits, and Scotland runs a different five year system.

What are the basic time limits?

A claim against an accountant is normally brought in contract (the engagement), in the tort of negligence, or both. The Limitation Act 1980 sets the same headline period for each:

Type of claim Period Runs from Provision
Simple contract 6 years Date the cause of action accrued Section 5
Tort, including negligence 6 years Date the cause of action accrued Section 2
Negligence with latent damage Later of 6 years or 3 years from knowledge Accrual, or the starting date of knowledge Section 14A
Overriding longstop for negligence 15 years Last negligent act or omission Section 14B
Contract made by deed 12 years Date the cause of action accrued Section 8
Contribution between defendants 2 years Judgment or agreed settlement Section 10

When does the six year clock start?

Both six year periods run from when the cause of action accrued, which is not always the same date. A contract claim accrues on breach, which is why ACCA describes the normal limitation period as six years from the date the negligent act occurred. A negligence claim needs damage as well as a careless act, so it can accrue later than the work itself; section 14B(2)(a) expressly contemplates a negligence claim whose cause of action has not yet accrued.

For tax work the gap can be wide. HMRC can usually assess within four years after the end of the tax year, six years where the loss of tax was careless and 20 years where it was deliberate (sections 34 and 36 of the Taxes Management Act 1970); see how far back HMRC can go. An error in a 2020 return may not produce an assessment, interest and penalties until several years later, and the client’s claim against the adviser follows from that.

How does the latent damage extension work?

Section 14A applies to actions for damages for negligence where the client only learns the relevant facts after the cause of action accrued. The period becomes either six years from accrual or three years from the starting date, whichever ends later. The starting date is the earliest date the client had both the knowledge required to sue and a right to do so. That knowledge has two parts:

  • Material facts about the damage: facts that would lead a reasonable person to consider the loss serious enough to sue a defendant who admitted liability and could pay (section 14A(7)).
  • Other facts: that the damage was attributable to the act or omission said to be negligent, and the identity of the defendant (section 14A(8)).

Two rules stop clients delaying deliberately. Knowing that the acts amounted to negligence as a matter of law is irrelevant (section 14A(9)). And a client is treated as knowing what they could reasonably have found out from observable facts or from expert advice it was reasonable to seek (section 14A(10)). The trigger often comes when a new adviser reviews the files: ICAEW’s run off guidance notes that the period after a client moves firms is when earlier errors tend to be spotted.

What is the 15 year longstop?

Section 14B bars any negligence action, other than personal injury, brought more than 15 years after the last act or omission alleged to be negligent and to have caused the damage. It applies even if the cause of action has not yet accrued or the section 14A starting date has not yet arrived. For most accountancy work, therefore, the maximum exposure in negligence is 15 years from the advice or return in question.

When can the limits be extended further?

  • Fraud and deliberate concealment. Under section 32 the period does not start until the client discovered, or could with reasonable diligence have discovered, the fraud or concealment. A deliberate breach of duty in circumstances where it is unlikely to be discovered for some time counts as deliberate concealment (section 32(2)). Sections 14A and 14B do not apply in a concealment case (section 32(5)), so the longstop is lost.
  • Disability. If the client lacked capacity when the right of action accrued, section 28 allows six years from when the disability ended or the client died.
  • Contribution claims. If a client sues another adviser, such as a solicitor, that adviser has two years from the judgment or the date the settlement was agreed to claim a contribution from the accountant (section 10). This can bring the accountant into a dispute after the client’s own time limit has expired.

Is it different in Scotland and Northern Ireland?

Northern Ireland largely mirrors England and Wales: six years for simple contract under article 4 of the Limitation (Northern Ireland) Order 1989, with a latent damage provision in article 11.

Scotland uses prescription, which extinguishes the obligation itself. Under section 6 of the Prescription and Limitation (Scotland) Act 1973 an obligation to pay damages is extinguished after five years without a relevant claim. Under section 11 the five years run from when the loss occurred, or, if later, from when the client was aware or could with reasonable diligence have been aware that loss had occurred, that it was caused by an act or omission, and who was responsible. Awareness that the act was actionable is not needed. A 20 year long negative prescription runs from the date of the act or omission (sections 7 and 11(4), as amended with effect from 28 February 2025).

How might the dates work in practice?

Illustration only. An accountant in England files a client’s return in January 2021 with an incorrect relief claim. HMRC opens an enquiry and, in May 2025, issues an amendment with interest and penalties. The client’s new accountant explains in September 2026 that the original claim was wrong.

  • The contract claim is likely to be measured from the January 2021 breach, ending in January 2027.
  • The negligence claim may have accrued later, when loss was suffered, with six years from that date.
  • If the client could not reasonably have known the relevant facts earlier, section 14A could extend the negligence claim to September 2029.
  • Whatever happens, the longstop expires in January 2036.

What should practices do about it?

Because claims can arrive long after the work, practices need records, letters and insurance that last as long as the exposure:

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.