Ltd Company Accountancy Fees - Am I being ripped off?

[ADC]

I am being charged £600 plus VAT for preparation and submission of annual accounts for 2009-10 including submisssion to companies house.

I am also being charged £175 plus VAT for for completion and submission of Company Corporation Tax Return.

I will also get charged for doing the annual personal tax return of 3 x directors on top of that.

We use kashflow so the accountant doesn't really have much work to do. Is it a good deal or am i being ripped off?

 

[Homshaw]

I am being charged £600 plus VAT for preparation and submission of annual accounts for 2009-10 including submisssion to companies house.

I am also being charged £175 plus VAT for for completion and submission of Company Corporation Tax Return.

I will also get charged for doing the annual personal tax return of 3 x directors on top of that.

We use kashflow so the accountant doesn't really have much work to do. Is it a good deal or am i being ripped off?

Hard to say on the accounts. Just depends how much work is involved

The Corporation Tax return seems steep unless there are complications.

You don't say how much they are charging for personal tax returns or how involved they are

 

[elaine@cheapaccounting]

Depends is always the answer. Our fees are fully visible and can help you as a comparison:

https://www.cheapaccounting.co.uk/indexservicesltdsup.php

 

[ADC]

Hard to say on the accounts. Just depends how much work is involved

The Corporation Tax return seems steep unless there are complications.

You don't say how much they are charging for personal tax returns or how involved they are

They haven't billed us for that yet. I think it was about £450 plus vat last year, but we were a partnership not a ltd company then.

 

[ADC]

Depends is always the answer. Our fees are fully visible and can help you as a comparison:

https://www.cheapaccounting.co.uk/indexservicesltdsup.php

Not that visible. Our turnover is £404K so it says POA.

 

[elaine@cheapaccounting]

well then you are not being ripped off at that level of turnover!

 

[ADC]

well then you are not being ripped off at that level of turnover!

Thanks. Thought i would just check.

 

[accountancyextra]

I am being charged £600 plus VAT for preparation and submission of annual accounts for 2009-10 including submisssion to companies house.

I am also being charged £175 plus VAT for for completion and submission of Company Corporation Tax Return.

I will also get charged for doing the annual personal tax return of 3 x directors on top of that.

We use kashflow so the accountant doesn't really have much work to do. Is it a good deal or am i being ripped off?

In every walk of life you'll alawys find someone who'll do something for less money. Chuck up an enquiry to have a website built on this forum and you'll see what I mean. By the end of the thread there will be someone almost willing to pay you to build one on your behalf

It's all about value. Are you getting a value for money service? Is the accountant responsive to queries, does he give good tax advice, is he proactive etc................I notice from a previous thread of yours that you'd incorporated from a partnership, was that to save tax? If the tax is more than £600 I'd say he's earned his fee!!

Even though you are using Kashflow, there is still a minimum amount of work needed to complete your accounts and submit them to Companies House. There is the checking of the bank rec, the production of control accounts, checking of the VAT & PAYE. Then there's the correcting of any miscodings to do and the computation of capital allowances for the tax return, all on top of actually preparing the accounts themselves.

Given all that, I don't think you are being ripped off at all

 

[MyAccountantOnline]

I am being charged £600 plus VAT for preparation and submission of annual accounts for 2009-10 including submisssion to companies house.

I am also being charged £175 plus VAT for for completion and submission of Company Corporation Tax Return.

I will also get charged for doing the annual personal tax return of 3 x directors on top of that.

We use kashflow so the accountant doesn't really have much work to do. Is it a good deal or am i being ripped off?

I wouldnt say you were being ripped off - you may find an accountant that would charge a little less but not much.

 

[Bob]

We use kashflow so the accountant doesn't really have much work to do. Is it a good deal or am i being ripped off?

Looking at your thread about Kashflow, I am pleased to see that you still think it is a good product. A great endorsement for Duane after all the slagging off he has had from you.

FWIW, the price you are quoting seems more than reasonable provided you have confidence in the advice you are being given and you have no other issues with him/her.

 

[DFL]

I think you are being undercharged.

 

[MM Associates]

Those fees seem on the low side to me also, is the firm chartered?

I hope you are getting good service with those fees including tax planning for both the company and you personally.

 

[ADC]

Those fees seem on the low side to me also, is the firm chartered?

I hope you are getting good service with those fees including tax planning for both the company and you personally.

No, he is just a financial accountant, one of those taxassist franchises.

I never get any advice from them, apart from when we set up as a ltd company. He told us to pay ourselves £450 every 4 weeks and anything else take as a directors loan. I only really speak to them when i need my tax return doing.

Should i be getting more advice?

 

[Williams lester]

Should i be getting more advice?

Probably....you get what you pay for!

 

[David Griffiths]

I think you are being undercharged.

I agree with that. I don't think that the fee paid gives enough time to look at the accounts properly for a company of any size

It smacks of a sausage machine operation where they simply take your figures and put them on final accounts, errors and all. That's OK if that's what you're happy with, but it doesn't give the accountant time to look at the job critically or give any advice

 

[MM Associates]

No, he is just a financial accountant, one of those taxassist franchises.

I never get any advice from them, apart from when we set up as a ltd company. He told us to pay ourselves £450 every 4 weeks and anything else take as a directors loan. I only really speak to them when i need my tax return doing.

Should i be getting more advice?

The simple answer is yes, assuming your business needs it ofcourse. There are always ways to help clients save money but without knowing your full circumstances it is obviously very difficult to help.

Do you know if the money above your £450 which is being credited to your directors loan is then being adjusted for by a dividend? This could be one way to increase your directors loan account which would allow money to be drawn at a later date tax free. You will need to ensure you are completing all the necessary paperwork to go with the dividends.

 

[ADC]

The simple answer is yes, assuming your business needs it ofcourse. There are always ways to help clients save money but without knowing your full circumstances it is obviously very difficult to help.

Do you know if the money above your £450 which is being credited to your directors loan is then being adjusted for by a dividend? This could be one way to increase your directors loan account which would allow money to be drawn at a later date tax free. You will need to ensure you are completing all the necessary paperwork to go with the dividends.

Yes, he said something about he would draw up some paperwork to say we had a board meeting and we had decided to have x amount of didvidends. He said we should be able to draw up to around £35K each tax free doing it that way.

 

[elaine@cheapaccounting]

At that level of turnover and depending upon your plans for the future of this business I would suggest regular tax planning sessions.

 

[taxattack]

No, he is just a financial accountant, one of those taxassist franchises.

I never get any advice from them, apart from when we set up as a ltd company. He told us to pay ourselves £450 every 4 weeks and anything else take as a directors loan. I only really speak to them when i need my tax return doing.

Should i be getting more advice?

When you transferred the partnership into the company, did they advise about the transfer of assets, including goodwill (if any).

Ref the directors loan, have they mentioned benefits in kind, or the disclosure requirements of the Companies Act?.

Is the company registered as an employer?

Etc, etc.

Chris

 

[ADC]

When you transferred the partnership into the company, did they advise about the transfer of assets, including goodwill (if any).

Ref the directors loan, have they mentioned benefits in kind, or the disclosure requirements of the Companies Act?.

Is the company registered as an employer?

Etc, etc.

Chris

No they didn't tell us anything about the transfer of assets or the companies act.

The only people who work here are the 3 directors, so do we still need to register?

 

[Williams lester]

No they didn't tell us anything about the transfer of assets or the companies act.

The only people who work here are the 3 directors, so do we still need to register?

You could be missing out on a significant contribution to your DLA if they have not valued the goodwill.

Whether you need to register as an employer will depend on how much you earn. If it is £475 monthly, then yes, you do.

Also, dividend paperwork cannot be completed retrospectively, it should be done as an when you hold the board meetings to declare a dividend.

 

[ADC]

You could be missing out on a significant contribution to your DLA if they have not valued the goodwill.

Whether you need to register as an employer will depend on how much you earn. If it is £475 monthly, then yes, you do.

Also, dividend paperwork cannot be completed retrospectively, it should be done as an when you hold the board meetings to declare a dividend.

It's £450 monthly we draw each as a salary.

He hasn't done the dividend paperwork yet, so i think we are supposed to have a board meeting then. He said something about drawing some minutes up for us.

 

[elaine@cheapaccounting]

At £450 / month you are wasting £25 x 3 x 21% of CT saving - £15.75 / month!

Ok not a lot of money but better in your business than HMRC

 

[Strontium Dog]

If only because there are so many points not being fully addressed.

Was a business valuation carried out to calculate goodill on incorporation - no

Is the salary optimised for tax purposes - probably not

Are interim dividends legally declared with due regard to distributable profits - you tell me

Have all contracts been correctly changed into the company name to avoid future problems - I doubt it.

The first point alone could be costing you thousands of pounds in tax you shouldn't be paying. There could be many more points which no-one in the world has the time to consider for £600+VAT.

Even with good computerised bookeeping I'd be looking to charge £1000 - £2000 for the assignment, but look to cover all of the bases.

 

[KM-Tiger]

... £15.75 / month!

Ok not a lot of money ...

That 's exactly 15 guineas, or 126 half crowns. Just think how high that pile of half crowns would be.

 

[Strontium Dog]

One of the reasons, in my opinion, incorporations dont get done properly is accountants don't charge properly. Its a bugbear of mine. We have one fee for a client wishing to form a company from scratch, but a second (much higher) figure for incorporating an existing business. There is much more work involved, but the potential rewards for the client are also greater.

In the end I am not sure whether the fault lies with the clients, whose obsession is with cost rather than value, or the accountants who pander to them.

 

[Homshaw]

I have heard of accountancy companies who aim to charge 1% of turnover. I think its fairer to charge for the amount of work involved. Difficulty is it does seem to work in reverse. I have seem poor low turnover jobs where I struggle to make money.

I'm sure there are good and bad Taxassist Accountants just as there are good and bad accountants generally.

You do need the valuation of goodwill sorting out. You would think there has to be some and it could save a significant sum of money especially if you go into higher rate tax.

Backdated divi vouchers and minutes are a bad idea. What is so difficult about doing them when you make the payment? The lady who looks after my wages does my client's limited company divis. The client rings up or emails says when and the amount to be paid and she emails them back within minutes. You just need to be sure the after tax profits are available

 

[Strontium Dog]

If you are not registered as an employer, you are also all missing out on your entitlement to state benefits.

 

[ADC]

What is valuation of goodwill? I'd be grateful if someone could explain.

I don't think we have have any interim dividends? Presumably those are dividends given out halfway through the year? Any extra money we take on top of our salary just goes onto the directors loan and according to the accountant the end of year dividends will pay that off.

There aren't really any contracts to change as we sell mainly to the public, all money is paid up front before we send any goods.

 

[Strontium Dog]

What is valuation of goodwill? I'd be grateful if someone could explain.

The goodwill is basically the value of the business over and above its constituent assets. If it is capable being sold separately you can also "sell" it to your company. You pay capital gains tax, but claim a relief, thus resulting in a very low rate of tax. That money gets added to your directors loan so that you can draw against it without paying any more tax. Prior to incorporation, you should have a valuation carried out, so that you can justify the figure later to HMRC if they challenge it, by waving a report at them.

It gets better though. In many instances you can write off the cost of goodwill in the aquiring company's books, and claim corporation tax relief!

In my opinion anyone not considering the above issues when incorporating is missing out on a large slice of the benefits of so doing. The fact of the matter is you need advisers who have the time (ie, paid time) to consider the issues.

 

[ADC]

The goodwill is basically the value of the business over and above its constituent assets. If it is capable being sold separately you can also "sell" it to your company. You pay capital gains tax, but claim a relief, thus resulting in a very low rate of tax. That money gets added to your directors loan so that you can draw against it without paying any more tax. Prior to incorporation, you should have a valuation carried out, so that you can justify the figure later to HMRC if they challenge it, by waving a report at them.

It gets better though. In many instances you can write off the cost of goodwill in the aquiring company's books, and claim corporation tax relief!

In my opinion anyone not considering the above issues when incorporating is missing out on a large slice of the benefits of so doing. The fact of the matter is you need advisers who have the time (ie, paid time) to consider the issues.

Oh well, i suppose it's too late to do anything about that 17 months later. He should have told us about that though. I don't mind paying more for a better accountant as long as I save more in tax than the difference on their fee. I might have a change for next year. When I was starting out though, I was under the impression that all accountants were the same, didn't realise some could save you more money than others.

 

[DFL]

It's funny that whenever anyone comes on here regarding their accountant everyone jumps in with they should be doing this or they should be doing that. Is it genuine concern and helpful advice or are there intentions to unsettle the poster and promote own services?

So their was no transfer of goodwill in this instance - how does anyone know whether their was goodwill capable of being transferred? The accountant may have taken a correct view on this and not disclosed it to OP as a goodwill transfer wasn't possible.

Is the salary optimised for tax purposes - probably not, my guess is that the £450 was mentioned when that was the PA and it hasn't been inflated in line with the increase. The accountant may even adjust it at year end, we don't know.

Are interim dividends legally declared with due regard to distributable profits? There is absolutely no evidence to the contrary.

Have all contracts been correctly changed into the company name to avoid future problems - why is it doubted without any evidence?

"The first point alone could be costing you thousands of pounds in tax you shouldn't be paying. There could be many more points which no-one in the world has the time to consider for £600+VAT" Could Could Could, all speculation.

Even with good computerised bookeeping I'd be looking to charge £1000 - £2000 for the assignment, but look to cover all of the bases.[/quote] - How is this relevent to the OP?

To say that OP is being 'ripped off' is not the type of language to be expected without firm evidence, if I was the OP's accountant I would have a bit to say about this.

 

[elaine@cheapaccounting]

promote own services?

And of course that would never be your intention

 

[DFL]

Oh well, i suppose it's too late to do anything about that 17 months later. He should have told us about that though. I don't mind paying more for a better accountant as long as I save more in tax than the difference on their fee. I might have a change for next year. When I was starting out though, I was under the impression that all accountants were the same, didn't realise some could save you more money than others.

ADC - Common mistake, and one to learn from. Accountants come in all shapes and sizes, with limitations and specialisms, the same as any industry. Lots of good accountants aren't always good at tax planning and vice versa.

 

[DFL]

And of course that would never be your intention

Certainly Elaine, I'm all for self promotion but not at the expense of another firm who for all we know may have done absolutely nothing wrong. Big difference.

 

[elaine@cheapaccounting]

Certainly Elaine, I'm all for self promotion but not at the expense of another firm who for all we know may have done absolutely nothing wrong. Big difference.

I'm confused. If I am asked by someone what is the best amount to pay themself as a director each month then of course I am going to give the answer that I believe is best advice on the info presented.

If that is different to advice received then I'm afraid that there is not a lot I can do about that - do I not give the correct advice?

In no way do I view giving the advice as I see fit disparaging another accountant which I am not allowed to do as a member of the ICAEW. In fact I think I would find myself in more bother if I did not give the correct advice.

So I think we will have to agree to disagree on this one.

 

[DFL]

Why do we have to agree to disagree? I never mentioned you - I specifically referred to another poster who claimed that the OP was being 'ripped off' by his accountant! Do you not agree that this is disparaging and questionable?

 

[elaine@cheapaccounting]

Why do we have to agree to disagree? I never mentioned you - I specifically referred to another poster who claimed that the OP was being 'ripped off' by his accountant! Do you not agree that this is disparaging and questionable?

OK not sure I see that - the title was Strontium Dog (and others).
But happy to accept that your reference was more specific to the one person then.


See I was reading:

"everyone jumps in with they should be doing this or they should be doing that. Is it genuine concern and helpful advice or are there intentions to unsettle the poster and promote own services?"

Isn't it funny when you feel that you have written one thing and someone reads it differently

 

[accountancyextra]

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.

 

[DFL]

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.