Ltd Company Accountancy Fees - Am I being ripped off?

[elaine@cheapaccounting]

Fair enough - badly worded by me as clearly it is not everyone, many of the posts on here reflect that.

The (and others) reference is to those that do use questionable tactics to gain clients at the expense of other accountants, without being armed with the full facts. Fair enough, it's a dog eat dog world out there but I always try to conduct business properly and (maybe naively) expect others to do the same. When I first joined this forum what struck me was the decency of the members, sadly I do see that slipping downhill a bit.

I see a general increase in these types of posts on here that never used to happen and it doesn't enhance the quality of the site in my opinion. I can't think of any names specifically it just happens, but your name certainly wasn't one that I was thinking of.

Fair enough

I think from time to time there are peaks and troughs in ones enjoyment of being a member here. I've been there in the past but I have to say that I generally enjoy being part of this little corner of the forum, in the Accounts bit.

And from time to time it is good to have a bit of banter with those 'old timers'!

Although I seem to have lost my normal sparring partner Well I say normal ...

 

[DFL]

Jason,

You maybe completely right about the goodwill issue. The accountant may well have considered and dissmissed it. However, he hasn't communicated that to the client or explained what he has/ hasn't done. Whether the client sought additional advice from this forum or from his mate down the pub, the accountant has left himself wide open to doubts creeping in about whether he has done the best for the client.

To me, that's a failing with a lot of members in our profession - poor communication skills.

Stuart

I agree that communication can be very poor in the profession though if we communicated every aspect of tax planning that is not applicable to the client then we wouldn't get much done! Accountants would be better off communicating to clients that tax planning is structured differently to different businesses / trades etc and that what is good for one business doesn't always work for another.

 

[accountancyextra]

Stuart

I agree that communication can be very poor in the profession though if we communicated every aspect of tax planning that is not applicable to the client then we wouldn't get much done! Accountants would be better off communicating to clients that tax planning is structured differently to different businesses / trades etc and that what is good for one business doesn't always work for another.

Sure, every piece of tax planning that's not applicable would be taking it to the extreme

However, in this case, the accountants were doing the incorporation work and must have at some point considered the goodwill question themselves. Why not communicate that to the client and explain why it's not applicable as part of the incorpoartion meeting? It doesn't ahve to be a technical response, just a reasoning. After all, if the client then goes down the pub (or onto a forum like this) and has goodwill thrown at him, he doesn't start to doubt what he hasn't been told.

I consider every single one of our sole trader clients for incorpoartion every year. When it's not appropriate to incorporate them I tell them so and tell them why. They appreciate that I've taken the time to consider their tax affairs in this way and, when their mates tell them that they should be incorpoarted, they can reply with authority

 

[DFL]

Sure, every piece of tax planning that's not applicable would be taking it to the extreme

However, in this case, the accountants were doing the incorporation work and must have at some point considered the goodwill question themselves. Why not communicate that to the client and explain why it's not applicable as part of the incorpoartion meeting? It doesn't ahve to be a technical response, just a reasoning. After all, if the client then goes down the pub (or onto a forum like this) and has goodwill thrown at him, he doesn't start to doubt what he hasn't been told.

I consider every single one of our sole trader clients for incorpoartion every year. When it's not appropriate to incorporate them I tell them so and tell them why. They appreciate that I've taken the time to consider their tax affairs in this way and, when their mates tell them that they should be incorpoarted, they can reply with authority

Stuart

All valid points - I like your annual review policy as I'm sure your clients do.

With regard to the communication issue, i do agree with you but sometimes it isn't always realistic. I am sure that this isn't the case with the OP, but some clients, when dealing with the finer points of incorporation, find it difficult to grasp and understand. To then add into the mix the transfering of goodwill, especially if not appropriate in their case, would be giving of too much information and causing extra confusion imo - though do like your transparent approach and effective communication skills.

 

[Homshaw]

I think the biggest area of concern for poor or no advice is Working Tax Credits. I just met a client who has been really struggling financially. He has been struggling by on a very low income, two children and a wife that doesn't work. I reckon if he had received advice in the area when he was first entitled to it he would have been at least £30K better off.

I did see an article from the ACCA which suggested an accountant should put in his engagement letter whether he offered WTC advice or not. I can't say I agree with that approach because it is possible to optimise the tax position but be worse of overall when WTC is thrown into the equation.

 

[DFL]

Totally agree that tax credits is an area hugely overlooked by many accountants and that this is an issue that should be addressed.

 

[accountancyextra]

Totally agree that tax credits is an area hugely overlooked by many accountants and that this is an issue that should be addressed.

Entirely agree. Did some tax credits planning for a client just this last week. Found that they had been underclaiming by £thousands!